Soybean Morning Update & Commentary: Soy complex a touch easier headed into the biscuit break.
Overnight grain markets traded slightly lower with corn, wheat and beans off by 2-3 cents as we head into a big harvest weekend for row crops. The week began with a sharp macro induced selloff for most commodities, but the balance of the week has largely seen strong recoveries to set up potential higher closes for the week as end user buying and technical buying against recent lows have helped stabilize the downside for now.
In the case of the soybean market, November futures are 2 ½ lower on the day and on the week headed into the biscuit break. The bull spreads are steady while CIF bids at the Gulf continue to firm, hinting at export demand even as 8 am sales confirmations have been elusive. Disappointing export sales totals and strong production expectations are keeping a lid on rally expectations. October options expire today and next Thursday we'll look forward to a big day featuring export sales, quarterly stocks and month/quarter end.
In the product trade, meal and oil are both a shade lower to start. Board crush margins are a penny better at 92 cents/bushel. Malaysian palm oil closed 5 ringgit lower after trading into new contract highs while canola is trading nearly $5 higher but remains stuck in its sideways trading range.
US harvest was slowed some this week with rains in the ECB but the outlook is favorable for US harvest to advance swiftly with above normal temperature and rain limited to the WCB and plains next week.
In Washington, if the there is no agreement made on raising the debt ceiling, a government shutdown could occur which could impact the release of regular USDA data.
Cattle on feed comes out after the close, the avg. trade estimate for on-feed at 98% of the year earlier level, placements onto feedlots in August were 99% of the year ago level and marketing in August were 100% of the year ago level.
Outside markets lean negative with the dollar bouncing back to trade 33 pts higher, the S&P is 26 handles lower and crude oil is trading $.13 lower after closing into new contract highs yesterday.
• Vegoil and oilseed analyst James Fry on Friday told conference suggested edible oil prices could ease over the next 6 to 12 months, but said the decline would not be sharp, expecting crude palm oil futures in Malaysia to average just below 4,000 ringgit/mt
• Pakistan vegoil refiner industry expert on Friday suggested 2021 oilseed imports are likely to be 20% higher than last year, bringing in a record 3.53 mln mt. So far this year they've imported 2.73 mln mt of oilseed.
• Grain analysts say higher prices this fall for Rapeseed will likely prompt British, German, French and other EU farmers to plant more Rapeseed to take advantage of better demand. Acres in Germany are seen up by around 10%, and in France by 15% to 20% higher for harvest in 2022.
• Chinese state planners are working to resolve power shortages that have disrupted production since the end of June, when new measures to curb emissions kicked in. The state planner focused on the country's fertilizer sector as a segment that has been particularly impacted. It urged the country's main energy producers to fulfill their supply contracts to fertilizer makers. The power crunch has resulted in soaring prices for a number of raw materials and caused at least three soybean processing plants in Tianjin to close recently.
• Power curbs in Tianjin China have pushed Louis Dreyfus to halt operations at its soybean crushing facility there since Sept 22nd, according to company statement.
• AgResource on Thursday afternoon forecast 21/22 Brazil soybean production at 143.69 mln mt up from their 20/21 output estimate at 133.14 mln mt
• Markit group on Thursday afternoon forecasts the 21/22 Brazil Soybean crop at 145 mln mt, up +1.0 mln mt over the prior estimate
• Deral on Thursday projects 21/22 Parana Soybean crop production at 20.96 mln mt little changed from the previous outlook at 20.95 mln mt
• On Thursday, Buenos Aires Grain Exchange weekly report pegged 21/22 Argentina Sunflower crop conditions 11% good to excellent, 73% fair, 16% poor to very poor, that compares to last week's 22% good to excellent, 69% fair, 9% poor to very poor.
• Latest Buenos Aires Grain Exchange report Thursday pegged Sunflower planting progress at 22.7% complete (last week 21.5%), year ago week 17.2%, long term average 31.6%
• Latest Buenos Aires Grain Exchange report Thursday pegged Sunflower flowering progress at % complete (last week %), year ago week %, long term average %
• Euronext Paris November rapeseed futures on Friday are trading -1.50 euros lower at 613.50 euros/mt
• Dalian November soybean futures on Friday traded +52 yuan higher ending at 6,023 yuan/mt; January soymeal futures fell -20 yuan to end at 3,527 yuan/mt
• Dalian January vegoil futures on Friday traded higher again, palm oil jumped +170 yuan higher ending at 8,648 yuan/mt, soyoil gained +144 yuan to end at 9,166 yuan/mt
• Malaysian October cash offers for RBD palm oil and olein on Friday traded -$2.50/mt lower ending at $1,192.50/mt and $1,195.00/mt, respectively
• Malaysian December crude palm oil futures on Friday traded -5 ringgit lower ending at 4,442 ringgit/mt
• Outside markets. Crude Oil +1c ; Gold +$2.90 ; Silver -7.4c ; US $ index +24 pts
US Gulf +2 to +77
Brazil Paranagua steady +225x
Cedar Rapids, IA steady -20x
Mankato, MN steady -30x
Decatur, IL steady -10x
Claypool, IN steady -5x
Columbus, OH steady -10x
Davenport, IA off 1 to -55x
Morris, IL up 7 to -38x