Afternoon Soybeans: Off to the races.
The soybean market began the day trading modestly weaker but after the morning bell rang, it was off to the races. July beans established a new contract settlement high with a 45 ½ cent rally as the new crop November contract did its best to keep up with a 32 cent gain, also a new contract settlement high. Since the Russian invasion of Ukraine in late February, the soybean market has traded within a broad sideways range and now the charts are poised to possibly make a significant breakout trade to the topside with the spike high in July beans just 15 cents away. Despite the dynamic price action, the day took on a holiday-like vibe over the second half of the session with the three day weekend coming up and some participants perhaps getting a head start on vacation time. We are open for a full day tomorrow, closed Monday for Memorial Day and re-open Monday evening for Tuesday's trade.
In the product trade, soybean oil had a strong bounce back trade with support coming from global veg oil and energy strength. Palm oil settled 1% higher early in the day and rapeseed gained 2.2-2.5% in the old/new crop contracts. Bean oil gained 1.60 cents/lb or 2%. Crude oil surged $3.80/barrel of 3.5% while heating oil gained nearly 3%. It was a team effort. On the other side of the oil share spread, meal did a decent job of holding its own with a $4 gain up front.
Board crush margins dropped to almost an 8 month low at $1.01/bushel spot, July crush peaked a month ago with a settlement high of $2.14/bushel.
In the cash markets, CIF bean bids at the Gulf backed off a nickel to +137. Interior bean bids remained steady/firm. Farm selling picked up some on the rally; one happy client told me he hit on an $18 cash sale.
The US planting and crop development weather outlook features a mostly favorable mix of rain/sunshine. Rains return to ND over the weekend to close their planting window again. The USDA announced they will allow farmers who are part of the federal conservation land contracts to voluntarily terminate their contracts and plant on that land, in order to help mitigate the global food crisis. The offer is open to farmers who are in the final year of their contract, they also said that 'Participants approved for this one-time, voluntary termination will not have to repay rental payments.'
Weekly export sales were not expected to be impressive, and today's data certainly fit that bill. Combined corn sales reached just 210 tmt, wheat 244 tmt, beans 720 tmt, meal 184 tmt, oil 6 tmt and cotton 132 trb. Of note, China cancelled 23 tmt of old crop corn, 108 tmt of old crop beans, and 9 tmt of old crop sorghum.
Old crop bean sales totaled 277 tmt, down 63% from the previous week and 48% from the prior 4-week average. The buying was led by Egypt (133), Japan (124, including 20 switched from unknown), the Netherlands (66, including 60 switched from unknown), Indonesia (58, including 55 from unknown), and Mexico (55), were offset by reductions primarily for China (108), Taiwan (55), and unknown destinations (7). New crop sales of 443 tmt went to unknown (284), Mexico (95), and Taiwan (64).
Combined old crop soybean sales plus shipments marketing year to date now total 59.485 mmt which is 3% behind last year's pace, narrowing the gap from 4% a week ago; this total represents 102% of the current USDA sales projected business for the marketing year compares to 98% average for this date, with 14 weeks remaining in the marketing year. New crop sales commitments total 11.818 mmt compared to 7.451 mmt this time last year - China/unknown account for 10.435 mmt or 88.2% mmt of these new crop commitments.
Elsewhere in the news, China's Nat'l Grain Trade Center on Thursday set June 1st as date to sell 500,000 mt of imported Soybeans from state reserves into the local market. In total during the recent round of reserve auctions, China has sold 1.86 mmt of state held reserves out of 4.3 mmt offered.
US Gulf off 5 to +137
Brazil Paranagua off 13 to +142
Sioux City, IA steady +20q
Mankato, MN steady +55q
Decatur, IL steady +65n
Claypool, IN up 10 to +60n
Columbus, OH steady -5n