Afternoon Soybeans: Board crush margins surge 8 cents higher.
The soybean market had plenty of follow through selling today after yesterday's crop report. That selling took the November futures 14 lower early in the day session before the bull spreads helped flat price recover to a 3 cent lower settlement. The crop report left no uncertainty about the fundamental shift to a bear stat environment in beans but the chart had become extremely oversold and we had some positive demand news this morning that helped the market recover much of the early loss.
The USDA reported private export sales of 330 tmt of beans to China and 198 tmt of beans to unknown; the business had been rumored in recent days but the confirmation was slow to materialize. US bean values are competitive again with a $10-$15/mt discount to Brazil showing on a landed basis to China for OND. More sales confirmations should be anticipated although our tepid sales pace to start the marketing year has left a demand hole that will be tough to completely climb back out of in our limited window as the primary supplier. That window is even slimmer than normal thanks to larger existing Brazilian supply/competition, the Gulf disruption last month, and a stronger early new crop planting pace than a year ago. Weekly export sales are delayed until Friday due to the Columbus Day holiday.
US soybean harvest reached 49% complete, well ahead of the 5 year avg. of 40%. That pace will slow temporarily due to rain this week but the forecast dries up by the weekend and the outlook is favorable for rapid harvest progress moving forward. Brazil has had plenty of moisture to support early planting and development, Argentina is now receiving much needed moisture that will help jumpstart their crop cycle as well.
In the product trade, the soybean oil market initially gave back its overnight gains after the morning pause before firming back throughout the day session. Bean oil maintained its leadership role and helped support the soybean recovery off its lows. Ever the dog, meal established another fresh low. Board crush margins surged 8 cents higher to $1.46/bushel.
Veg oil strength was a theme across the complex with Malaysian palm oil trading into a new all-time high on the spot month while the Dec contract settled +160 ringgit or 3.3% higher on strong demand from India after they lowered their import duties. Canola posted a more modest $3 gain but importantly, could not extend lower following yesterday's gap.
On the currency side, the dollar reversed lower by 42 pts after establishing a new high for its rally yesterday.
Elsewhere in the news, Brazil soy exports in October est. at 2.973 mmt, up from 2.678 forecast last week according to Anec. This compares to bean exports of 2.1 mmt in October 2020. Meal exports in October are forecast at 1.4 mmt and compares to 1.3 mmt in October of 2020.
Midday 6-10 Day and 8-14 Day Forecasts:
SAM 2 Week Precip Outlook 25.4 mm = 1 inch:
US Gulf up 1 to +76
Brazil Paranagua steady +200v
Cedar Rapids, IA steady opt price x
Mankato, MN steady +5x
Decatur, IL steady opt price x
Claypool, IN steady -10x
Columbus, OH steady -25x