Beans Red Into Thursday

Overnight action had initially extended the gains, though morning weakness has the board down by 5 1/2 to 7 1/2 cents following the WASDE rally. The initial report reaction yesterday shot bean futures higher with gains of nearly 40 cents. Prices walked back through the afternoon, but front month beans still closed 12 1/4 to 19 3/4 cents in the black. Preliminary open interest showed some net new buying, up 7,522 contracts on the day. Short covering was noted in November.  The meal market ended the session $7.40 to $11.40 in the black. December set new highs for the month. Soybean oil prices ended the day 12 points in the black. USDA lowered their average farm price for soybeans by 35 cents to $14/bu. There were no changes to the cash price for the products, at $390/ton for meal and 69c/lb for soy oil. 

USDA’s monthly WASDE and Crop Production reports showed a 0.7 bpa yield cut on no acreage change for a national average yield of 49.8 bpa and a production of 4.13 bbu. At the state level, IL was UNCH at 64 bpa, IN was 1 bpa lower, IA was also down 1 but NE was dropped from 5 to 49 bpa. The known carry-in increase offset some of the lighter production by 34 mbu for a net 31 mbu lighter supply. Stocks were unchanged as exports were trimmed by 40, crush was raised by 10 and the residual use took care of the last million. That extra crush raised soybean oil production by 120m lbs, but carry-in was down by 100. Their ending stocks were up by 20m lbs. In meal, USDA had production 250k tons higher, all to be used domestically. 

Internationally, the USDA added 1.22 MMT of soybean production as a 3 MMT boost to Brazil offset the lost U.S. output. That had Brazil at 152 MMT. Global trade was also 960k MT higher to 167.88 MMT. That mostly came via Argentina reflecting their recent heavy ‘soy dollar’ volumes. On net, the global soybean stockpile was 1.6 MMT higher to 100.52 MMT – the trade was looking for just a 0.9 MMT boost on average. 

Nov 22 Soybeans  closed at $13.96, up 19 3/4 cents, currently up 7 1/2 cents

Nearby Cash   was $13.46 ¼ on Wednesday, up 20 7/8 cents,

Jan 23 Soybeans  closed at $14.05, up 17 cents, currently up 7 1/2 cents

Mar 23 Soybeans  closed at $14.12 1/4, up 15 1/4 cents, currently down 7 1/2 cents