The soybean complex was lower across the board with soybeans down $.16 – $.21, meal was $4 – $6 lower, while oil was down 15 – 30. Like corn, Nov-23 has closed lower the past 3 sessions following Monday’s crop condition report. Weather forecasts remain threatening with little to no rain offered for the Midwest until early next week when only trace to .50” amounts are expected across the central Midwest. Combined with much above normal temperatures both corn and soybean crops will be racing toward an early maturity. As expected there were no deliveries against the Sept-23 contracts across the entire soybean complex. Export sales at 39 mil. bu. (-2 mil. – 2022/23 MY, 41 mil. – 23/24) were in line with expectations. Old crop exports are likely to come in very near the current USDA forecast of 1.980 bil. bu. New crop commitments have reached 475 mil. bu. still down 37% from YA, vs. the USDA forecast of down 8%, however the gap continues to narrow. In addition the USDA announced the sale of 132k tons (5 mil. bu.) of beans to China. Biodiesel and renewable diesel production surged to 406 mil. gallons in May-23, up 15% from April and up 47% from May-22. While the data is backward looking, it does help illustrate the building demand base for vegetable oil in biofuel production. This afternoon the Monthly Biofuel Capacity and Feedstock update showed bean oil usage in June grew 6% over the previous month to a record 1.207 bil. lbs. This was also up 49% from June-22. In the MY to date oil usage has reached 8.813 bil. lbs., up 17% from YA, vs. the USDA forecast of up only 13%. It appears the USDA increase of 100 mil. lbs for biofuel production in Aug. wasn’t nearly enough. The updated US drought monitor shows soybean area in drought expanded 2% last week to 40%, still well below the June peak of 63%.
Prices closed $.01 – $.03 lower as Dec-23 remains in a $4.74 – $5.05 trading range. Seasonal pressure often develops in the late August to early September timeframe as farmers clear bin space in advance of the upcoming harvest. Old crop grain sold on deferred pricing contracts often settle at the end of August as well. As expected there were no deliveries against the Sept-23 contract. Export sales at 42 mil. bu. (3 mil. – 22/23 MY, 39 – 23/24 MY) were at the high end of expectations. New crop export commitments have reached 329 mil. bu. still down 16% from YA vs. the USDA forecast of up 26%. The updated US drought monitor shows corn area in drought expanded 2% last week to 45%, still well below the June peak of 70%. Dec-23 has closed lower 3 days in a row following Monday’s crop condition report where ratings held in better than expected.
Prices backed up from midday levels closing lower across the board with the exception of Sept-23 KC. Chicago and KC were off $.04 – $.05, while MGEX was down $.12 – $.14. Deliveries against Chicago Sept-23 were heavy at 1,113 contracts, however in line with expectations. MGEX deliveries were 420, while KC were fairly light at 168. Although tensions in the Black Sea region remaining high, it hasn’t prevented agricultural products from being exported from the region. For now both sides appear willing to resuming the Black Sea Grain Initiative, or a suitable alternative. Export sales at 12 mil. bu. were on the low end of expectations. YTD commitments are down 24% from YA, vs. the USDA forecast of down 8%. US spring wheat area in drought increased another 3% to 57%, the highest since Feb-23. Winter wheat area in drought increased 2% to 46%. IKAR raised their Russian wheat production forecast 1.5 mmt to 91 mmt, while also raising their export forecast 2 mmt to 49.5 mmt. These are above the USDA estimates of 85 mmt on production and exports of 48 mmt. August rainfall in India was the lowest in over a century, 36% below normal threatening the production of wheat, rice, and sugar. Monsoonal rains in Sept will need to make up the shortfall or be faced with a continued surge in domestic food inflation. The BAGE reports the Argentine crop is 19% G/E, 58% fair, and 23% in poor to very poor condition. Algeria reported purchased between 500 – 600k mt of durum wheat between $465 – $490/mt CF. Most appears to have been sold by Mexico, Turkey, and Canada for Q4 shipment.
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