Soybean Morning Update & Commentary: Bull spreads helping to underpin flat price against contract lows.
<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\">Overnight grain markets traded higher led by beans and wheat bouncing off contract lows with corn tagging along in a range-bound trade. January beans are trading 10-11 cents higher and continue to respect near term support against the contract low. The bull spreads action is firm and adds to flat price support. The Jan-March spread is trading out to a new high at a 4.75 cent carry which reflects strong nearby demand and limited interest by the producer to sell cash at this price and timing. <br> <br>The outside markets have the dollar index trading .15 pts lower and crude oil $1 higher along with a firmer product trade that offer macro tailwinds to the early grain complex strength. <br> <br>In the product trade, oil and meal are both firmer to start the day with bean oil gaining in the oil share spread. Global veg oils are firmer including Malaysian palm oil printing new contract highs. Bean oil futures continue to respond to domestic and global demand headlines regarding biofuels which has contributed to a volatile trade and a recent liquidation of length but underlying fundamentals remain supportive. The fund position in meal is now approaching a record short after they finished liquidating their record long from a year ago. Board crush margins are seeing early relief, up by a nickel to $1.09/bushel. <br> <br>The COT report showed managed fund money through the trade date ending 11/26 had -17.1k corn (net long 97.4k), -7.5k srw (net short 59.1k), -1.2k hrw (net short 30.6k), -13.7k beans (net short 81.4k), -11.7k meal (net short 75.4k), and -32.8k oil (net long 23.1k). <br> <br>In the news:<br><ul class=\"decimal_type\"><li>Cordonnier raised his Brazilian soybean crop estimate another 2 mmt to 170 mmt, noting the only regional concern for dryness in Brazil was in western Parana, southern Mato Grosso do Sul, western Santa Catarina and parts of Rio Grande do Sul. He maintains a neutral/higher bias toward the crop. Cordonnier left his Brazilian corn crop forecast at 125 mmt. In Argentina, Cordonnier left his production forecasts unchanged at 57 mmt for soybeans and 48 mmt for corn, with a neutral bias toward both crops.</li><li>Vegoil traders Tuesday said India's festivals have lead to jump in November's edible oil imports, rising 12% month over month to 1.6 mln mt. That's the highest level since July 2024. Sunflower oil imports say the largest increasing rising +43% m/m to 341,000 mt, soyoil the second largest increase up +20% m/m to 410,000 mt, while palm oil imports edged up +0.5% m/m to 850,000 mt.</li></ul><ul><li>Argentina has raised domestic prices for biodiesel and bioethanol, both mandatory for blending with fossil fuels in the South American country, according to two decrees published in the official gazette on Tuesday. The economy ministry raised the minimum purchase price of biodiesel to 1,064,595 Argentine pesos per metric ton (about $1,051.97), up from the previous 1,023,649 pesos. Another decree raised the sugarcane-based bioethanol price to some 703.804 pesos per liter (around $0.70), up from the previous 683.305 pesos per liter.</li></ul><ul class=\"decimal_type\"><li>Citigroup economists, analyzing the Phase One trade deal from Donald Trump’s first term, report that China significantly underperformed on its import commitments. China fulfilled less than 60% of the agreed $200 billion increase in purchases for 2020-21 compared to 2017 levels.</li><li>Monday's USDA October 2024 Extra Long Staple Cotton Stocks On Hand (bales): 554 bales ; prior month 616 bales</li><li>Monday's USDA October 2024 Extra Long Staple Cotton Stocks On Hand (pounds): 276,000 lbs ; prior month 307,000 lbs.</li><li>Weekly bean inspections were 77 mb down from 78 mb last week. Weekly bean inspections need to average 26 mb to reach the USDA’s target of 1.825 bb. Wheat inspections total 404 mb which is 32% ahead of last year's pace of 306 mb. </li><li>The USDA census crush for October established a new all-time crush for any month of 215.6 mb compared to the average trade guess of 210.6 mb. </li><li>Oil stocks at the end of October tightened to 1.485 bln lbs compared to the average trade guess off 1.520 bln lbs and are the tighest since November 2016 (1.473 bln lbs). </li><li>Meal stocks in Octber were 303,430 short tons compared to last Octobers’ meal inventory of 201,071 and the prior month September 2024 stocks of 413,414. Meal stocks sit at a six-month low. </li><li>The Rosario Grain Exchange in Argentina said rains across the breadbasket region have quenched soil moisture levels, giving relief to farmers as they plant corn and soybeans. Rains this weekend were said to have covered southern growing regions after mostly falling in northern growing regions last week. They project soybean production of between 53 and 53.5 MMT and corn production of between 50 and 51 MMT. Wheat harvest should conclude in January, with production expected around 18.8 MMT. </li><li>South Korea state fishery announced they're seeking around 70,000 mt of optional origin Non GMO Soybeans in a tender to close on Dec 5th for 50,000 mt, and Dec 10th for the remaining 20,000 mt. The soybeans are for delivery in 2026.</li><li>Euronext Paris February rapeseed futures on Tuesday are trading +9.00 euros higher at 523.25 euros/mt</li><li>Dalian January soybean futures on Tuesday traded -19 yuan lower ending at 3,885 yuan/mt; January soymeal fell -24 yuan ending at 2,861 yuan/mt</li><li>On Tuesday, Dalian January vegoil futures traded mixed, palm oil rose +30 yuan ending at 10,254 yuan/mt, soyoil fell -114 yuan ending at 8,058 yuan/mt</li><li>Malaysian February crude palm oil futures on Tuesday jumped +121 ringgit higher ending at 5,076 ringgit/mt</li><li>On Tuesday, Malaysian Jan/Feb/Mar cash offers for RBD palm oil and olein traded +$30/mt higher ending at $1,215.00/mt and $1,220.00/mt, respectively</li><li>CBOT Deliveries: December Soybean Meal 43, Soybean Oil 0</li><li>Outside markets. Crude Oil +91c ; Gold +$2.60 ; Silver +43.1c ; US $ index -9 pts</li></ul><br>Soybean Basis: <br>Location Spot <br>US Gulf steady +86 <br>Cedar Rapids, IA steady -5f<br>Mankato, MN steady +5f <br>Decatur, IL steady +5f <br>Decatur, IN steady +5f <br>Columbus, OH steady -10f </div>