Afternoon Soybeans: Meal giveth and meal taketh.

The soybean market had a two-sided trade giving up overnight gains and making a low early during the day session before firming back with September gaining 2 cents while the new crop November contract dropped 9 cents.  The Sept.-Nov. bull spread traded into a new contract high before fading some but still managed to settle 11 higher at a 54 ½ cent inverse.  Meal had more of a struggle ending the day $15-$16 lower in old and new crop positions as the oil market resumed its leadership with sharp flat price gains of 2.55 and in the oil share which fully erased the week's losses.  Board crush was weaker by 9 cents up front to $2.14/bushel while new crop gained 3 cents to $1.86/bushel.  Central IL spot cash crush margins are 70 cents above the board.  For the week beans lost 22 cents, meal gained $3.8, and bean oil fell by 1 tick.  

The trade was cautious ahead of a key stretch of US crop weather where stressed crop areas to the west are expected to see some relief before the return of warmer and drier conditions. Central to eastern crop areas are generally expected to see a favorable mix of sun and rain. The forecast features a cool front moving through US crop areas early to mid-week next week which will bring some needed moisture to the western corn and soybean belt where many crops have missed rains this week. The greatest relief to dryness is expected in eastern South Dakota, southern Minnesota, and northern Iowa. Rainfall farther to the south in the western Corn Belt may not be very great limiting the break from dryness. The GFS model continues to offer the drier of the two outlooks relative to the wetter European forecast.

In demand news, the USDA reported 2 cargoes of US new crop beans sold to China and 2 more new crop bean cargoes were sold to unknown. US soybeans are $18-$20/mt cheaper than Brazilian beans on a landed basis to China. The economics are too much to pass up for China even if they are sore over the Taiwan visit. That doesn't mean they are all in on US beans as they also continue to buy Brazilian beans for fall shipment.

Cash markets are quiet with bean basis mixed. USDA crop report one week from today.

There were no bean or oil deliveries overnight, ADM retendered 17 meal receipts with JPM the stopper. Gibson City, IL cancelled 15 oil receipts leaving 149 open registrations.

Elsewhere in the news, Brazil farmer sales of 21/22 soybean crop is estimated at 79.9% compared to the 82.6% average for this date. 22/23 sales are estimated at 17.3% compared to 21.5% average for this date according to Safras.

IHS Markit (Informa) adjusted their US corn yield estimate from 179.5 bpa to 176.9 bpa for a crop size of 14.497 bb and their bean yield estimate from 52.0 bpa to 51.8 bpa for a crop size of 4.530 bb.

CME is raising margins on meal and oil effective at the close of business today. In soy meal, margins are being raised $350/contract in both Aug and Sept, and between $250 and $300/contract across all other months. In bean oil, margins are not changing in the first three months, however, Jan (2023) thru Sept (2023) are being raised between $200 and $350/contract, and Dec (2022), then Oct (2023) thru (Dec 2025) are each being raised $150/contract.

China sold 15.5 tmt of soybeans out of the 504 tmt offered in their latest reserve auction today. The price paid was $742/mt or $20.19/bushel equivalent. China has sold 2.49 mmt of state held bean reserves through 20 auctions so far this year out of 9.85 mmt offered.

France Ag Ministry crop report Friday estimated 2022 Rapeseed production at 4.35 mln mt, up from 3.98 mln mt last month

France Ag Ministry crop report Friday estimated 2022 Sunflower production at 1.92 mln mt, up +0.4% over last season

Soybean Basis:
Location Spot
US Gulf steady +295x
Sioux City, IA steady +25x
Mankato, MN steady -5x
Decatur, IL steady +160x
Claypool, IN off 20 to +140x
Columbus, OH steady +65x