Soybean Morning Update & Commentary: Soybeans testing contract lows.
<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\">Overnight grain markets traded weaker led by the soybean market which is retesting contract lows established in August. November beans are off by 7 cents heading into the break and are trading less than 20 cents from the contract low. The charts are extremely oversold but the momentum remains to the downside with no signs of exhaustion at the moment. The Nov-Jan bull spread is firmer today after yesterday’s reversal out of a new high. The selling is motivated by heavy supply side statistics with record production coming home domestically and projected globally. Meanwhile, demand for US imports from China appears to be contracting amidst challenging economic times and a strategic shift towards Brazilian imports ahead of an anticipated resumption of trade disputes with the possible return of a Trump administration. Keep in mind, the hard fought Phase One trade agreement with China remains in place but was not enforced by the current admin. Funds appear to be rebuilding their short position as evidenced by sizeable increases in open interest in recent days while the futures have been in free-fall. There were daily export sales of nearly 300 tmt of corn to Mexico/unknown but no soybeans announced. Weekly export sales are out tomorrow. <br> <br>In the product trade, soybean oil is trading steady to slightly higher while meal is a touch weaker. There is not much of any early influence on bean oil from the global veg oil or energy markets where trade is mixed. Board crush margins are firming by 8 cents to $1.76/bushel. <br> <br>In the news:<br><ul class=\"decimal_type\"><li>The USDA weekly drought update showed US corn area in drought expanded from 49% to 62% on the week and compares to 50% at this time last year, soybean area in drought expanded from 43% to 54% compared to 53% a year ago, winter wheat area in drought expanded from 47% to 52% compared to 48% a year ago.</li><li>Chinese state media Thursday, citing the Ag Ministry, reported 70% of the country's fall grain harvest has been completed. Around 83% of soybeans and over 70% of corn has been collected. In addition to harvest, the media reported 42% of the country's winter rapeseed has been planted, and 27% of winter wheat has been sown.</li><li>Buenos Aires Grains Exchange monthly climate report Wednesday suggest stronger than typical polar winds could dry out the country's breadbasket region over the coming months. This spring is expected to have lower than average rainfall, and remain that way into early summer months</li><li>Euronext Paris November rapeseed futures on Thursday are trading +0.25 euro higher at 492.25 euros/mt</li><li>Dalian January soybean futures on Thursday traded +10 yuan higher ending at 3,971 yuan/mt; January soymeal lost -5 yuan ending at 2,993 yuan/mt</li><li>On Thursday, Dalian January vegoil futures traded higher, palm oil gained +42 yuan ending at 8,922 yuan/mt, soyoil rose +34 yuan ending at 8,282 yuan/mt</li><li>Malaysian January palm oil futures on Thursday traded -34 ringgit lower ending at 4,277 ringgit/mt</li><li>Malaysian Jan/Feb/Mar cash offers for RBD palm oil and olein on Thursday traded -$5/mt lower ending at $1,025.00/mt and $1,030.00/mt, respectively</li><li>Outside markets. Crude Oil +28c ; Gold +$10.50 ; Silver -6.6c ; US $ index -8 pts</li></ul><br>Soybean Basis: <br>Location Spot <br>US Gulf steady +106 <br>Cedar Rapids, IA steady -25x <br>Mankato, MN steady +15x <br>Decatur, IL steady -18x <br>Decatur, IN steady -30x <br>Columbus, OH steady -40x </div>