The soybean market pressed yesterday’s highs overnight, but wasn’t able to do much with it before we got a cancellation of US beans to China at 8am. There were unconfirmed reports that China had cancelled a couple of cargoes of both U.S. and Brazilian soybeans for March shipment yesterday, but confirmation didn’t come until this morning.
Crush margins have continued to weaken in China which is likely contributing. The official cancellation was 245k MT of old crop beans, which has sent the market tumbling following the morning pause. So far, beans are down about a dime.
We have our first level of support down another dime at around $14.04 in the May. We’ll look for that area to hold. If the market can sustain only modest losses or even trade higher, as money flow continues, then look out.
Yesterday morning we got fresh estimates from Informa. They lowered the Brazilian bean production estimate 1.0 MMT to 88.8 MMT vs. USDA estimate at 90.0 MMT. Informa noted that Brazilian second crop soybean production will be up due to better bean prices compared to corn with yet to be planted double crop beans expected to account for 800,000 MT of its production estimate.
Informa also lower its Argentine production estimate 3.0 MMT to 54.0 from prior estimate at 57.0 MMT while USDA has maintained a 54.0 MMT estimate. Meanwhile, Oil World lowered its forecast for Brazil production by 1mmt to 84 MMT, and crop scout Cordonnier lowered his Brazil Soybean production estimate to 87.0 MMT off 1.5 from his previous estimate. Argentine Soybean production was left unchanged at 53.5 MMT.
In yesterdays price action, the bean oil market made a big trade to the upside today, which helped support the bean market. Outside of some light pressure following the morning break the market found steady support throughout the day as the market seemed to take a risk on mentality.
After the close, May soybeans were 13-3/4 cents higher at $14.23, while new crop was up 9-3/4. Daily volume in soybeans was off 25% on Tuesday to 148,109, while OI fell 4,209 on moderately active fund buying. There were no new contracts registered for delivery Tuesday, and deliveries dropped to 12 lots.
On the weather front, conditions in Brazil are a little too wet in parts of the West and that is slowing harvest activity but at this point conditions have stabilized from our February challenges and could add some late bushels back thanks to favorable conditions. Bean basis bids at the Gulf are 4 higher to +97, Decatur steady at +25.
LaSalle Street News Top News
— USDA reports cancellation of 245,000 mt of Soybeans to China for the 13/14 MY
— Report from the European Commission on Wednesday pegged the 2014/15 EU rapeseed crop at 20.7 mln mt down -100,000 mt from the 2013 crop.
— Ahead of Monday’s USDA monthly report, analysts expect Soybean ending stocks at 140 mln bu
— Vegoil analyst Mistry on Wednesday told group in the year ending Sept 2014 worldwide biodiesel demand will be up +3.0 mln mt over the prior year and overall vegoil demand worldwide is seen rising by +6.5 mln mt.
— Vegoil analyst Mistry on Wednesday told group they expect under normal weather conditions that palm oil prices in the July through October period to range between 2,600 to 2,900 ringgit/mt
— Pending Tender: Cash traders on Friday say March 3rd is deadline in 10,000 mt optional origin Sunseed oil tender floated by Iraq.
— Pending Tender: On Monday Bangladesh announced 2,000 mt Soyoil tender to close on March 19th.
— Liffe Paris May rapeseed futures trading Wednesday up +2.50 euros at 404.50 euros/mt
— Dalian Sept soybean futures last traded 4,472 yuan/mt on Wednesday up +19 yuan/mt on the day; Sept soymeal traded +11 yuan higher finishing at 3,281 yuan/mt
— Dalian Sept vegoil futures finished higher on Wednesday, soyoil gained +104 yuan finishing at 7,050, while palm oil futures added +52 yuan to end at 6,330 yuan/mt
— On Wednesday cash sources note Malaysian cash offers for Apr/May/June RBD palm oil and palm olein were up +$12.50 at $902.50/mt
— Malaysian crude palm oil futures for May delivery gained +31 ringgit on Wednesday finishing the session at 2,832 ringgit/mt
— CBOT Soybean Volume & Open Interest for March 4th 2014 was 148,109; Open Interest decreased – 4,209 to 668,238.
— CBOT Soybean Oil Volume & Open Interest for March 4th 2014 was 89,947; Open Interest increased +1,859 to 301,820.
— CBOT Soybean Meal Volume & Open Interest for March 4th 2014 was 61,991; Open Interest increased +1,915 to 310,149.
— CBOT March 2014 Soybean Futures Delivery Report: 12 for intent date 03/04, and 140 month to date [Delivery Date – 03/06)]
— CBOT March 2014 Soybean Oil Futures Delivery Report: 225 for intent date 03/04, and 5,720 month to date [Delivery Date – 03/06)]
— CBOT March 2014 Soybean Meal Futures Delivery Report: 1 for intent date 03/04, and 4 month to date [Delivery Date – 03/06)]
— Weather: 6-10 Day forecast: Normal to Below Temps. Normal to Below Precip
— Outside markets. Crude Oil off -33c @ $103.00; Gold off -$1.70 @ $1336.20 ; Silver up +4.3c @ $21.26 ; US $ index off -3 pts @ 80.15
LaSalle Street News Cash Markets
— CIF Soybeans steady up 4. FH Mar. +97 to +100, Mar. +93 to +100, Apr. +85 to +90, May +77 to +85, June +87 to +95
