Grain Spreads: Beans Lead

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Commentary

A strong start to the day’s session was met with profit taking in a case of “buy the rumor, sell the fact” on the Chinese soybean sale announcement this morning in my opinion. Private exporters reported sales of 792,000 metric tons of soybeans for delivery to China during the 2025/2026 marketing year. Yesterday it was rumored China had booked several vessels of US soybeans, and this was confirmed in the return of the daily flash sale reports.  China is believed to have bought 900k-1.2 MMT of U.S. soybeans yesterday, marking the first notable purchases of U.S. soybeans since the late October “trade deal. While the weekly sales are a positive, it was a big reason for the 30-cent rally in soybeans yesterday in my opinion. There was also news that Argentine meal had cleared Chinese customs also dampened buying enthusiasm in the soy complex and caused meal to correct from a 9-month high. A cut to Brazil’s crop forecast and building concerns over drier forecasts for parts of South America limited early losses, as did ongoing strength in the cash market. The soy sector also received bullish crush data. Yesterday’s NOPA soybean crush report showed 227.6 million bushels of soybeans were crushed by NOPA members in October, sharply above average market expectations of 209.5 mil bushels, significantly above last year’s Oct NOPA crush of 199.9 mil bushels and easily a new all-time record. Technically we hit 11.61 this week which was an upside target which represents 15% higher on year. 20 percent higher is at 12.12, which is my next upside target. A close under 11.20 from here would be bearish in my view and open the door for 10.70 to be targeted as it’s the recent low and top end price of a major gap. We aren’t staying at present levels in the 1150-1160 area for long in my opinion. 

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Sean Lusk

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