Afternoon Soybeans: Bull spreads reverse course late.

The soybean market continued its recovery with strong product support although the bull spreads may be showing some signs of fatigue.  The nearby bull spread turned weaker later in the trading session as the July - August bean spread reversed out of a new contract high from $1.15 ¾ over and settled 13 cents off that high.    July beans still managed to gain 10 ½ while the August contract ended the day 15 cents higher, and the new crop November picked up 15 ¾.  

In the product trade, meal and oil both remained strong with meal gaining in the oil share spread. Bean oil turned weaker during the session as the crude oil market reversed but bean oil was able to separate itself and recover with a .51 gain in the July and .22 in the Dec. The nearby meal spread reversed out of a new high, similar to the bean spreads, while flat price gained $8.1 in the July and $6.8 in the Dec. The combined product strength helped the July board crush tack on another 13 cents to $1.43 while the new crop firmed by 2 cents to $1.54/bushel. Canola was two sided like the bean oil and managed a $1.5 gain. Malaysian palm oil was closed for holiday.

The weather maps are a little hotter and a little wetter today, particularly in the 6-10 day period. World weather's outlook suggests crops should remain favorably rated in much of the Midwest during the next ten days to two weeks as mild temperatures through the next week and at least some rain should aid establishment of newly planted crops with shallow root systems while more advanced crops will have adequate subsoil moisture to support crop development. Rain will be light and infrequent enough that many areas dry down overall, which is not abnormal for this time of year, and timely rain will be needed in July to keep conditions favorable for crops. A timely increase in rain will occur across the northern Midwest early next week while timely showers and thunderstorms scatter across the Midwest July 6-9. Shower activity will diminish July 10-12 and stress to crops should increase and expand in the drier areas.

Tomorrow will feature July deliveries, weekly export sales, USDA stocks and acreage reports, month/quarter end, in addition to plenty of whether focus. As Roy Huckabay would say, better get your track shoes on for this one.

First notice on July futures is tomorrow. The CME shows no change in registrations of 0 corn, 0 beans, 0 meal, 98 oil, 1,010 srw, and 66 hrw receipts.

For tomorrow's weekly export sales report, the range of trade estimates for combined old/new crop corn sales is .300-1.2 mmt, wheat 200-600 tmt, beans 0-800 tmt, meal 50-25 tmt, and oil 0-35 tmt.

For the USDA reports, the trade on average is estimating that beans lost around 400k acres from the March 31st report. Bean stocks on June 1 are estimated on average at 965 mb, well above last year's stocks of 769 mb.


Elsewhere in the news, a Reuters survey of analysts shows they expect 22/23 Brazil soybean acres at 42.2 million hectares, if realized that would be 2.9% higher than this past season, they expect 22/23 Brazil soybean crop at
147.9 mln mt, that would be an increase of 20.0 mln mt over the prior year. They attributed the higher production forecast to better yields and larger expected planted acres.

Grain traders Wednesday say Turkey announced tender seeking 18,000 mt of Sunflower Oil, the offer deadline is July 5th. The vegoil is for delivery between July 20 to Aug 29th.


Soybean Basis:
Location Spot
US Gulf off 12 to +77
Brazil Paranagua off 5 to +155
Sioux City, IA steady +25q
Mankato, MN steady +20q
Decatur, IL steady +140q
Claypool, IN steady +50n
Columbus, OH steady +75q