Soybean Morning Update & Commentary: Beans look to follow through lower after yesterday's fail.

Overnight grain markets were mixed with corn and wheat each trading into new lows before firming back higher this morning, beans are off their session lows but remain in negative territory.  Still no deliveries for the soy complex.  The soybean bull spreads are firm with the wet weather forecast weighing on the new crop contracts and lack of deliveries propping up the front end.  For now, the warm and wet near term maps are having a larger influence on soybean sentiment than the smaller than expected acreage number from yesterday's report and the extremely tight new/old crop balance sheet.  Weather this time of year rules all.  The trade will continue to look for additional old crop bean export cancellations which can add some needed padding to the S&D.  August beans are 12 ½ cents lower while the new crop November contract is off by 18 ¼ cents.  The month of May featured a $2 trading range for spot month beans and ended 8 cents lower, the November contract had a slightly tighter $1.85 trading range but fell by 51 cents. 

The USDA report showed soybean planted area for 2022 is estimated at 88.3 million acres, up 1 percent from last year but well below the average trade estimate for 90.45 million. The implications of the smaller acreage base on the new crop S&D are significant. Using the latest USDA balance sheet projections and updated acres, you would have a sub 150 million bushel carryout for next year. Due to the wet conditions in the Dakotas and MN, NASS will resurvey producers in those states and if the newly collected data justifies any changes, NASS will publish updated acreage estimates in the August WASDE. Soybeans stored in all positions on June 1, 2022 totaled 971 million bushels, up 26 percent from June 1, 2021, and close to the average trade estimate of 965 million bushes.

The outside markets feature the energies bouncing back with crude oil trading nearly $3 higher and nag gas up .44 following yesterday's month/quarter end sell off. Global economic jitters remain - Nomura downgraded its outlook for the global economy to recession. They see recessions on the horizon for the US, the EU, UK, Japan, S Korea, Australia, and Canada. Equities are trading lower and the dollar higher.

The grains have a full session of trade today. Census crush and COT will be out after the close. We will be closed for Independence Day on Monday and won't reopen until Tuesday at 8:30 cst in what promises to a weather charged environment. Everybody have a safe and Happy 4th of July!

In the product trade, oil and meal are both lower to start with meal gaining in the share. The meal spreads are firm and continue to underpin flat price. Bean oil is holding on and trying not to break down last month's lows, the energy recovery should offer support although palm oil and canola are both weaker. Malaysian palm oil settled 4.1% lower early on while new crop canola is trading 1.5% lower. Board crush margins are mixed to start.

In the news:
• European Commission on Friday lowered their 22/23 Rapeseed production forecast to 17.9 mln mt off -200,000 mt from their previous month's forecast; they increased their 22/23 MY Rapeseed import forecast to 4.5 mln mt from the 4.0 mln mt in the May report, 21/22 rapeseed imports are now seen at 5.3 mln mt up from 4.9 mln mt last month
• USDA census crush for May comes out after the close. The data is expected to show crush of 181.9 mb on average, above the 180.9 mb processed in April. This would be a new record crush for the month of May if realized, but it also would be a fifth consecutive monthly decline in average daily crush rate. Oil stocks are estimated at an eight-month low of 2.341 bln lbs, down from 2.424 bln bls in April. India's state run weather bureau on Friday forecast July's monsoon rains falling between 94% to 106% of the long term average. The bureau noted June's monsoon rains were 8% lower due to scant rains in the central region of the country.
• The Argentine truckers strike ended on Thursday, after some unions upset with diesel shortages reached a deal to lift the one-week protest around the major port of Rosario, which is expected to help the flow of grains for export going forward.
• SGS on Friday estimated Malaysian palm oil product exports in June at 1.230 mln mt off -7.4% from May's exports.
• USDA's NASS will collect additional information on 2022 Minnesota, North Dakota, and South Dakota grain and oilseed planted acres due to planting delays in the those states. Any revised acres will be released in their August 12th monthly crop production report.
• Analysts are forecasting next Tuesday's Stats Canada planted acres report to show Canola acres at 21.3 mln acres, that compares with their April projection at 20.9 mln acres and last year's crop at 22.5 mln acres. The data will be released at 7:30 am CT, Tuesday, July 5th
• Analysts are forecasting next Tuesday's Stats Canada planted acres report to show Soybean acres at 5.2 mln acres, that compares with their April projection at 5.4 mln acres and last year's crop at 5.3 mln acres.
• Euronext Paris August rapeseed futures on Friday are trading -9.00 euros lower at 685.00 euros/mt
• Dalian Sept soybean futures on Friday traded -72 yuan lower ending at 5,924 yuan/mt; Sept soymeal futures lost -15 yuan ending at 3,886 yuan/mt
• On Friday, Dalian Sept vegoil futures traded sharply lower, soyoil lost -362 yuan finishing at 9,930 yuan/mt, palm oil gave up -450 yuan finishing at 9,096 yuan/mt
• Malaysian cash offers for Aug/Sept RBD palm oil and olein on Friday traded -$40/mt lower ending at $1,227.50/mt and $1,230.00/mt, respectively
• CBOT Deliveries: July Corn, 0, SRW 843, HRW 1, Soybean 0, Meal 0, Oil 0
• Outside markets. Crude Oil +$2.09 ; Gold -$17.30 ; Silver -71.2c ; US $ index +32 pts

World Weather Inc. Morning Highlights:
• A few waves of rain will move through the U.S. Midwest during the next ten days to two weeks offering rain for many areas in the region, but the precipitation is not likely to be uniform across the region
o With that said, there should be sufficient moisture to support crops in the bulk of the Corn and Soybean Belt, although some pockets of dryness are expected
• A high pressure ridge in the central and southern U.S. Plains and over the Delta will restrict rainfall in those areas and keep temperatures warmer biased
o This is expected to be most notable next week and into the following weekend
• West Texas "meaningful" rainfall potentials remain low for the next ten days, although a few showers will be possible
• A good mix of rain and sunshine will impact the southeastern U.S.
• Canada's Prairies will see scattered showers and thunderstorms frequently during the next two weeks with most crop areas impacted at one time or another
• Argentina remains dry for the next ten days and possibly two weeks threatening the emergence and establishment of winter wheat
• Western Europe has had favorable rainfall in the past week, but the region is expected to dry out over the next ten days
• Portions of eastern Europe will also have pockets of dryness
• India and China are expecting rain in most of their crop areas and the bottom line will be favorable for production potentials and general crop development
• Eastern and central Queensland, Australia and northeastern New South Wales are getting rain today and it should linger into the weekend favoring future winter crop development, but stalling fieldwork
• Tropical Storm Chaba will bring heavy rain to Guangdong and Hunan, China this weekend before its remnants move to Shandong
• Tropical Storm Aere will impact western Japan early next week with some heavy rain
• Potential Tropical Storm Two in the Caribbean Sea will bring flooding rain to northern Costa Rica and southern most Nicaragua.


Soybean Basis:
Location Spot
US Gulf steady +77
Brazil Paranagua up 5 to +160
Sioux City, IA off 5 to +140x
Mankato, MN up 15 to +35q
Decatur, IL steady +140q
Claypool, IN steady +50n
Columbus, OH steady +75q