Afternoon Soybeans: USDA lowers domestic soybean carryout by 19%.
<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\"><div style=\"line-height: 1;\"><span style=\"font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\">The soybean market had a firmer session of trade underway pre-WASDE but post release, beans hit the gas and rallied sharply on a much larger than expected cut in the US soybean yield/production. March beans settled 26.25 cents higher which is the second largest single day rally in the life of the contract (+29.75 on 7/13/23). The nearby bull spread action was mixed but the old crop futures gained on the new crop. For the week, front month beans gained 32.5 cents while the new crop gained 23 cents. <br> <br>In the product trade, bean oil nearly closed limit-up as the initial details of on the climate model for clean fuel tax credits. The rules for biofuel subsidies was seen as unfriendly to sustainable aviation fuel made from ethanol but friendly towards biofuels made from soybean oil as steps will be taken to limit pathways for used cooking oil imports as a competing feedstock. Further details are cloudy, especially with the new Trump Administration set to take the reins. The USDA showed us increased exports in the bean oil S&D that more than offset reduced biofuel usage.<br> <br>Soybean meal tried to catch a ride on the back of the soybean rally but was unable to sustain strength and settled $1 lower as it continues to shed risk premium. The oil share spread surged to a 6-week high at 43.3%. Board crush margins gained 3 cents to $1.32/bushel. <br> <br>Here’s what the report said:<br> <br>The USDA reduced soybean yield by 1.0 bpa to 50.7 compared to the average trade guess of 51.6 bpa. The states that saw the largest downward yield revisions from the November estimate were IN (-4.8%), OH (-3.8%), SD (-4.4%), KS (-7.9%), MI (-3.9%), and TN (-6.7%) while only 3 states saw upward revisions MO (+4.3%), NC (+2.6%), and PN (+4.7%). The yield revision combined with a 200,000 reduction in harvested acres cut total production by 95 mb to 4.366 bb. Imports were increased by 5 to 20 mb and residual usage increased by 1 to 36 mb. No other demand adjustments were made. The US soybean carryout tightened to 380 mb from 470 mb and compares to the average trade guess of 460 mb and last year’s carryout of 342 mb. The stocks to use ratio is 8.7%, up from last year’s 8.3%. <br> <br>Soybeans stored in all positions on December 1, 2024 totaled 3.10 billion bushels, up 3 percent from December 1, 2023. Soybean stocks stored on farms totaled 1.54 billion bushels, up 6 percent from a year ago. Off-farm stocks, at 1.56 billion bushels, are up 1 percent from last December. Indicated disappearance for September - November 2024 totaled 1.61 billion bushels, up 13 percent from the same period a year earlier.<br> <br>The domestic bean oil carryout increased by 25 mln lbs to 1.531 bln lbs. Production was increased by 75 mln, imports increased by 50 mln, and biofuel usage was lowered by 400 mln, these supply increases were mostly offset by an increase in exports by 500 mln. The meal balance sheet adjustments included a 200 thousand short ton increase in production that was offset by a like increase in domestic disappearance. The average price of meal was raised by $10 to $310/short ton. <br> <br> <br>The global soybean carryout tightened by 3.5 mmt to 128.37 mmt compared to the average guess for a slightly increase to 132.2 mmt. Most of the reduction was from the smaller US crop while China’s bean crop was lowered by 150 tmt. Brazil and Argentina’s production was left unchanged at 169 mmt and 52 mmt respectively, Brazil’s crush was increased by 1 to 59.1 mmt. Global bean oil carryout was increased by 80 tmt to 5.11 mmt and the meal carryout was raised by 25 tmt to 16.99 mmt. <br> <br> Elsewhere in the news, Old crop soybean sales of 289 tmt--a marketing-year low--were down 40% from the previous week and 72% from the prior 4-week average. Soybean exports of 1.580 mmt were down 7% from the previous week and from the prior 4-week average. <br> <br>Old crop meal sales of 145 tmt were down 29% from the previous week and 44% from the prior 4-week average. Meal exports of 235 tmt were down 7% from the previous week and 23% from the prior 4-week average.<br> <br>Old crop bean oil sales of 35 tmt were down 9% from the previous week and 7% from the prior 4-week average. Bean oil exports of 11 tmt were down 82% from the previous week and 63% from the prior 4-week average. <br> <br>The Buenos Aires Grain Exchange reports that 97% of the Argy soybean crop is planted, up from 87% last week. Crop ratings are in decline with soybeans seen as 49% G/E and 8% P/VP compared to 53% G/E and 4% P/VP last week. Argy corn is 91.6% planted, up from 87.5% last week. Corn ratings are seen at 42% G/E and 9% P/VP off from 48% G/E and 4% P/VP last week.<br> <br>Biden administration sources cited by Reuters said next week's expected release of clean fuel tax credits will not include "climate-smart" agriculture practices. Excluding the practices, according to analysts, would make it more difficult for ethanol producers to access clean fuel energy credits, including credits for sustainable aviation fuel output. The plan reportedly would limit pathways for used cooking oil imports. <br> <br>A World Trade Organization (WTO) panel ruled Friday in favor of the European Union (EU) in a dispute with Indonesia, a major palm oil producer, over restrictions in the EU-27 on the use of palm oil as a biofuel feedstock. The WTO found the EU's measures against these biofuels to be consistent with international trade rules, although it admitted certain deficiencies in the way the measures were drafted and applied, the organization's reports said.<br> <br>Brazil soybean production is projected at 173.71 mmt vs. 171.78 mmt previously, according to Safras & Mercado. They see soybean sales at 35% of expected output vs. 29.1% a year earlier. They project total corn production at 135.74 mmt vs. 134.84 mmt previously.<br> <br>Brazil’s soybean production is projected at 167.94 mmt vs. 170.41 mmt previously, according to Patria Agronegocios. Total corn production is projected at 129.82 mmt bs. 129.27 mmt previously. <br> <br>The Buenos Aires Grain Exchange reports that 97% of the Argy soybean crop is planted, up from 87% last week. Crop ratings are in decline with soybeans seen as 49% G/E and 8% P/VP compared to 53% G/E and 4% P/VP last week. Argy corn is 91.6% planted, up from 87.5% last week. Corn ratings are seen at 42% G/E and 9% P/VP off from 48% G/E and 4% P/VP last week.<br> <br>China’s ag ministry kept its 2024-25 soybean import forecast at 94.6 MMT, down 10.15 MMT (9.7%) from last year. The ag min raised its estimate for the 2024 crop by 1.08 MMT to a record 294.92 MMT. The ministry slashed its 2024-25 corn import forecast by 4 MMT to 9 MMT, which is now down 14.41 MMT (61.6%) from last year.<br> <br>CBOT Deliveries: January Soybean 33, Meal 44, Oil 20<br> <br>Soybean Basis: <br>Location Spot <br>US Gulf steady +84 <br>Cedar Rapids, IA steady -20h<br>Mankato, MN off 5 to -45h<br>Decatur, IL steady opt price h<br>Decatur, IN steady +3h <br>Columbus, OH steady -25h </span></div></div>