Afternoon Soybeans: Beans bounce back with flat price gains, bull spread does not.

The soybean market bounced back with a strong performance in flat price despite the bull spreads not participating.  September beans gained 11 ¼ and the new crop November contract settled 20 ¾ higher while confirming that yesterday's spread reversal was likely a blow off top.  

The trade remains concerned about crops due to the dry conditions most notably in the western soybean areas. During key pod fill timing this month the forecasts are less than ideal when it comes to rainfall. The GFS model backed off on some of the rain totals hinted at in yesterday's overaggressive run but there should still be some moisture in the cards. On the bad, not everyone will be fortunate to get them though with the maps showing W IA, C IL and SD looking mostly dry for the next week. On the good, the forecast features cooler temps and does offer opportunity for rain to reach into some of the dry spots including KS, NE, ND and MO.

Weekly export sales this morning fell within the range of expectations with strong meal sales standing out as the feature while the sting of a net negative old crop bean number (-67 tmt) was mitigated by a solid new crop total of 477 tmt. In addition, the USDA reported a private sale at 8 am of 103 tmt of new crop meal to Mexico. Argentina's issues with their currency and limited farmer selling have led to increased export demand from the US in meal.

Cash markets were quiet with bean bids showing mostly steady. Some processor bids were firmer including Gilman, IL up by 20 cents to +200x as they stretch to try and source bushels that are becoming more and more difficult to locate, but they certainly have the margins to help motivate the farmer with new crop just around the corner.

In the product trade, oil has resumed leadership over meal in recent weeks. The oil share spread has moved out to a 6-week recovery high in the new crop while the old crop is close to making that same trade. Bean oil also has recovered to a 6-week high in flat price including today's rally of 1.92 in the old crop and 1.63 in the new crop. Meal bounced back and is showing some resiliency following yesterday's spike trade, thanks to strong demand from the exporter. Meal gained nearly $7 in the old crop and almost $5 in the new crop. Board crush margins surged 25 cents higher up front and settled at a new high of $2.46/bushel while the new crop added 7 cents to $2.02/bushel.

Weekly old crop bean sales were net negative 67 tmt, buyer included Germany (152 tmt, including 141 switched from previously announced unknown destinations), the Netherlands (151 tmt, including 138 unknown), Japan (87 tmt, including 96 from unknown and decreases of 20), Pakistan (66 tmt, including 66 from unknown), and Indonesia (61, including 55 from unknown), were offset by reductions primarily for unknown (569 tmt), and China (66 tmt). New crop sales of 477 tmt were primarily for China (195 tmt), unknown destinations (184 tmt), Japan (40 tmt), Mexico (39 tmt), and Colombia (13 tmt).

Combined old crop soybean sales plus shipments marketing year to date now total 59.461 mmt or 2.184 billion bushels; just ahead of the USDA's marketing year projection of 2.170 billion bushels. China/unknown account for 3.194 mmt or 68% out of the 4.670 mmt (172 mb) remaining unshipped old crop commitments. There are only 3 weeks remaining in the marketing year. New crop sales commitments total 15.743 mmt compared to 11.723 mmt this time last year - China/unknown account for 13.155 mmt or 84% mmt of these new crop commitments.

August futures expire tomorrow and the weekly charts in the soy complex will take a thumping next week on the roll to September top step. No overnight deliveries in beans, meal, or oil.

The FSA crop acreage data dump claims is scheduled for noon tomorrow; this will give us the first look at the number of prevent plant and failed acres.

Week 2 options expire tomorrow, the atm bean straddle is pricing in a 35 cent range on report day.

USDA crop report to be released tomorrow at 11 am cst.

Analysts are expecting Friday's USDA monthly crop report to show 2022 US Soybean production at 4.48
billion bushels, July's production estimate was 4.505 billion bu. Yields are forecast at 51.1
bushels per acre compared to last month's 51.5 bpa estimate. Harvested acres are seen at 87.72 mln

Ahead of Friday's USDA monthly crop report, analysts are forecasting 22/23 global Soybean ending
stockpiles at 99.5 mln mt compared to July's 99.61 mln mt. The 21/22 ending stocks are forecast at
88.9 mln mt compared to the 88.73 mln mt in July's report.

Analysts are forecasting Friday's USDA 22/23 US Soybean ending stocks at 230 million bushels, that
compares to last month's 230 mln bu. The 21/22 ending stocks are seen at 226 mln bu up from July's
215 mln bu.

Elsewhere in the news, CONAB left Brazil's soybean production and exports in 21/22 unchanged at 124 mmt and 75.2 mmt respectively. They lowered the total corn crop by 1 mmt to 144.7 mmt with the reduction coming out of the Safrinha crop that was taken to 87.4 mmt, corn exports was unchanged 37.5 mmt. They increased their wheat production estimate by 160 tmt to 9.2 mmt.

Rosario Grain Exchange forecasts the 22/23 Argentina Corn harvest at 55.0 mmt and forecast the 22/23 soybean harvest at 47.0 mmt. Corn acres are seen off -4.7% from last season to 8.0 mln hectares, but soy acres are seen increasing by 700,000 ha to 16.8 mln ha.

Soybean Basis:
Location Spot
US Gulf up 5 to +250x
Sioux City, IA steady +25x
Mankato, MN steady -5x
Decatur, IL steady +160x
Claypool, IN steady +140x
Columbus, OH steady +55x