Soybean Price Indexes

by cmdtyNewswires - Fri Jan 24, 4:40PM CST

Soybeans were down 7 1/2 on Friday, which ensured a weekly loss of 27 3/4 cents in the March contracts. Soybean meal futures closed $0.60/ton lower on Friday and closed the week $2.30/ton lower in the March futures. March soybean oil futures lost 46 points on Friday trades, which pushed futures 133 cents lower wk/wk. Soybean spec traders flipped their soybean position back to net short as the 01/21 CoT report indicated. Managed money stayed net short in soybean meal. Soy oil specs were less net long as of Tuesday. USDA reported weekly soybean export sales of 790,006 MT. That was a wk/wk increase of 23% but was 25.9% lower than the same week last year. New crop soybean bookings for the week ending 1/16 were in line with analyst expectations at 120,743 MT. Total unshipped commits are 6.977 MMT. As for soybean meal, the update showed more than expected sales for the week ending 01/16, with 641,919 MT in bookings. That was a weekly increase of 71.1% and was 162.2% more than the same wee... Read more

by cmdty Update with Darin Newsom - Fri Jan 24, 10:55AM CST
Tracking corn basis has been fascinating and frustrating all at the same time. The ongoing uptrend (strengthening) of the cmdty National Corn Basis Index (NCBI, weighted national average) can be traced back to early September 2018 and a weekly close of roughly 95 1/4 cents under the Dec 2018 futures contract. Since then the climb through this week’s calculation (through Thursday afternoon) of 13 1/2 cents under has been nearly unchecked, plowing through numerous rolls from one contract to the next and seemingly shrugging off times of both weak and strong carry in the futures market’s forward curve. However, if we compare it wo what we’ve been told the last couple of marketing years, this extraordinary run in basis doesn’t add up. Recall from recent USDA reports that 2018-2019 marketing year (began in September 2018, along with the bottom in basis) ending stocks were supposedly 2.2 billion bushels (bb), second only to the 2.3 bb reported at the end of the 2016-2017 marketing year. Yet basis never blinked. I’ve put together a study using the marketing year daily average of the cmdty National Corn Price Index (NCPI, weighted national cash average price), a function of the NCBI (cash = futures +/- basis), that shows correlation to ending stocks-to-use (es/u), the final measure of fundamental bullishness or bearishness. And what my study shows (I talk about it in more detail on my website) is USDA has likely overestimated es/u for the previous two marketing years and now 2019-2020. If we take the degree of overestimation into account, suddenly the message the NCBI is telling us makes much more sense. Darin Newsom President Darin Newsom Analysis Inc.

by cmdty Update with Darin Newsom - Thu Jan 23, 10:26AM CST
This week’s USDA weekly export sales and shipment update, usually released Thursday mornings, was delayed a day due to Monday’s USDA holiday. That gives us time to contemplate what the latest numbers, through Thursday, January 16, might hold for U.S. wheat. Consider the old-crop Chicago (SRW) March-May futures spread has moved to an inverse this week, a move that a week ago (the cutoff day for the upcoming release) was still just a strong possibility. And as we know from our study of market spreads, an inverse reflects a strong bullish sentiment for short-term supply and demand. A look at the previous weekly update (through January 9) showed the pace of all U.S. wheat shipments projecting total marketing year demand at 932 mb, up 42 mb from the previous marketing year’s reported all-wheat shipments. However, the continued bullishness of the old-crop Chicago futures spread and the cmdty National SRW Wheat Basis Index (SRBI, weighted national average) still calculated near 6 cents under (March). Recall the Chicago wheat futures market has long been viewed as a proxy for world supply and demand given it is the most heavily traded futures market, so these two bullish fundamental reads (nearby spread and basis) continue to reflect developments in France, the Black Sea Region (Russia and Ukraine), and Australia. It’s interesting to note the SRBI continues to plateau (see my post from Dec. 26) as merchandisers allow the March futures contract to generate cash supplies to meet demand. The threat is a bearish breakdown by the SRBI that would give us a different fundamental read. Stay tuned. Darin Newsom President Darin Newsom Analysis Inc.

by cmdty Update with Darin Newsom - Wed Jan 22, 12:37PM CST
As I talked about on my website Wednesday morning, Tuesday was not a good day for the soybean market. Coming out of a U.S. 3-day holiday weekend, hopes were high that follow-through buying from Friday would be seen. However, Friday’s rally in soybeans wasn’t as impressive as what was seen in the neighboring corn market, if for no other reason than soybeans did not see the commercial buying that drove corn to double digit gains. In fact, futures spreads closed flat to a slightly stronger carry indicating the commercial side of soybeans was actually selling. Additionally, trade volume was down once again indicating the buying that was there wasn’t enthusiastic. Then came Tuesday’s sharp sell-off driven by strong selling from both noncommercial and commercial traders. Regarding the latter, not only did futures spreads show a stronger carry, with the March-to-May closing at 13 3/4 cents and covering roughly 61% of calculated full commercial carry (based on CME’s 8 cents per bushel per month storage rate), but the cmdty National Soybean Basis Index (NSBI, weighted national average) weakened as well. The latter is the more concerning given the normal inverse relationship between basis and futures. Yet, Tuesday’s NSBI was calculated at 55 1/4 cents under March futures as compared to the previous Friday’s calculation of 55 cents under. Granted, this isn’t a huge move but the fact it weakened at all while following the plummet in futures has to be a bit disheartening for market bulls. Particularly with Brazil’s harvest drawing closer every day. Darin Newsom President Darin Newsom Analysis Inc.