Soybean Price Indexes

by cmdtyNewswires - Fri Jul 10, 4:41PM CDT

Soybeans closed 6 3/4 to 10 3/4 cents lower in the red with double digit losses in new crop futures. Bean meal traded down by as much as $5/ton. Soy oil futures also closed in the red with losses of 7 to 8 points per lb. USDA estimates soybean production at 4.135 bbu, which was a smaller than expected increase. Shifting residual use from 4 mbu to a negative 46 mbu, 2019/20 carryout was up to 620 mbu. New crop ending stocks were also up by more than expected, with a 30 mbu bump to 425. Despite the larger ending stocks, USDA raised the new crop bean cash price 30 cents to $8.50/bu. World bean carryout was increased 480k MT to 99.7 MMT for old crop, but new crop was 1.26 MMT lower at 95.08. Brazilian old crop bean production was hiked to 126 MMT, larger than any of the published pre-report estimates. In the weekly CoT report, soybean spec traders were 99,243 contracts net long on July 7. That was the largest net long since May 29 of 2018. Managed money’s net short in soymeal was down 5... Read more

by cmdty Update with Darin Newsom - Sun Jul 12, 4:14PM CDT
If I were to tell you the more active futures contract rallied 42 cents last week, while the underlying cash commodity was halfway through its latest harvest, the assumption would be basis took a beating on its weekly chart. Well, we need to remember what Coach Buttermaker famously told the Bad News Bears about assume, for the market I’m talking about is soft red winter (SRW) wheat, and national average basis took anything but a beating last week. Friday afternoon saw the cmdty National SRW National Basis Index (SRBI, weighted national average) calculated at roughly 13 3/4 cents under September Chicago futures, up about 1/2 cent for the day and roughly 2 cents stronger (yes, 2 whole cents) for the week. Fundamentally there certainly seems to be something brewing in the SRW wheat market given the explosion in basis and the action in futures spreads. The July (in delivery)-September spread rocketed to an inverse of 1 3/4 cents while the September-December spread saw its carry trimmed to 5 cents, covering roughly 28% of calculated full commercial carry. Recall from previous discussions I consider 33% or less bullish, with an inverted spread reflecting an extremely bullish supply and demand situation. There has been a great deal of talk recently about production decreases in Russia, Ukraine, and Argentina. While USDA did not acknowledge this situation in its most recent WASDE report (released last Friday), futures spreads and the SRBI indicate the concern is real. This could work in the favor of U.S. wheat producers as they head down the homestretch of the 2020 harvest over the coming weeks. Darin Newsom President Darin Newsom Analysis Inc.

by cmdty Update with Darin Newsom - Sat Jul 11, 5:51AM CDT
Those of you paying attention to USDA July round of Supply and Demand reports likely noticed some of the oddities in the soybean numbers. First and foremost, USDA upped its 2019-2020 ending stocks guess to 620 mb, an increase of 35 mb from June, but still well short of what my analysis of the marketing year daily average for the cmdty National Soybean Price Index (NSPI, weighted national average cash price) is indicating. Let’s just say USDA’s latest guess, combined with its estimate of old-crop demand of 3.857 bb put ending stocks-to-use at 16.1%. Using the daily average price for the NSPI through the end of June puts my calculation of ending stocks-to-use at 33.5%. Okay, so maybe my analysis hyper-bearish conclusion is way out there but consider this. Based on USDA’s own Quarterly Stocks number from June 30 (stocks on hand as of June 1) of 1.386 bb, applying average Q4 demand brings 2019-2020 ending stocks in at about 810 mb. Additionally, I had to laugh at USDA dropping its residual use demand category by 50 mb, to (-46 mb), to make its July adjustment. Never mind that exports are still projected to come up at least 100 mb short of USDA’s standing demand guess of 1.65 bb, with last Thursday’s weekly update (for the week ending July 2) showed total export shipments just short of 1.4 bb with only 8 reporting weeks remaining. That seems to be a lot to ask, particularly with national average basis not indicating demand is skyrocketing this late in the marketing year. Darin Newsom President Darin Newsom Analysis Inc.

by cmdty Update with Darin Newsom - Thu Jul 9, 3:38PM CDT
This week I’ve had the opportunity to visit with a number of producers from across the U.S. Southern Plains and Midwest, with the most popular topic being that of corn basis. The most amusing, if one wants to use that word, were the stories (yes, more than one) of long, harvest-like lines filled with trucks moving last year’s crop ahead of this year’s harvest. Yes, this often happens in late July and early August, but everything is running ahead of schedule when it comes to corn this year. Despite the early pre-harvest rush, national average basis continues to hold firm with the cmdty National Corn Basis Index calculated at 24 3/4 cents under September futures Thursday afternoon. This was fractionally stronger than Wednesday’s calculation, and 1/4 cent stronger that the previous Thursday’s figure, indicating next week’s export inspections (Monday) and shipments (Thursday) could be firm once again. Speaking of exports, a producer from southwest Kansas told me how an ethanol plant in his area had a stronger basis bid for milo (grain sorghum) than corn, due in large part to the strength of the U.S. export program to China this marketing year. In the latest weekly government update, U.S. milo exports were 132.4 mb, almost 2.5 times greater than last year’s 54.9 mb for the same week. By percentage, this makes U.S. milo the most improved year-to-year exported grain. It will be interesting to see how long this torrid pace continues, with the 2020 harvest approaching. By percentage, milo continues to be the marketing year-to-marketing year leader in percent gain in the export shipment game. Darin Newsom President Darin Newsom Analysis Inc.