Hard Drop in Soybeans for Report Day
Soybeans are currently sitting just 3 to 5 cents off their lows for midday following 1.7% to 2.5% losses out of the reports. Soymeal futures are down by 2.3% as well. Soy oil futures are also trading 1.8% in the red through midday. USDA lowered the cash average price by 15 cents to $12.75, the soy oil cash average price was 3 cents lower to 54 c/lb, and soymeal was $10 weaker to $380.
The monthly domestic S&D update from USDA had soybean acreage down by 400k to 82.4 million, but yield up by 0.7 bpa to 50.6. That raised soybean production by 36 mbu to 4.165 billion. The average trade guess going into the report was to see a 7.2 mbu trim. USDA made no changes to the demand side (save a 3 mbu reduced residual figure) leaving carryout at 280 mbu.
NASS data showed 3 bbu of soybeans were counted on Dec 1. That included 1.453 bbu on farms and 1.547 bbu off farms. The trade was looking to see 2.977 bbu on average going into the report. After revising both production and carry-in, the implied Q1 usage was 1.459 bbu compared to 1.548 bbu last year.
World soybean S&Ds were fairly similar to the Dec report on net, with 100k MT larger production and 390k MT looser carryout. USDA cut Brazil’s soybean output by 4 MMT to 157. CONAB had lowered their Brazilian soybean production figure by 4.9 MMT to 155.3 MMT in their January report. Argentina production was 2 MMT larger to 50 MMT. THe trade was looking for a 700k MT increase going in.
Pre-report estimates show analysts expect the WAOB to cut Brazil’s soybean forecast by at least 1 MMT to as much as 8.2 MMT, with 156.7 MMT representing the average trade guess. Argentina’s output is expected to increase by 700k MT on average, though estimates ranged from UNCH to +2 MMT. USDA had Argentina at 48 MMT in December, and the Rosario Exchange just hiked their estimate to 52 MMT.
Jan 24 Soybeans are at $12.30 1/2, down 3/4 cent,
Nearby Cash is at $11.49 1/2, down 31 1/8 cents,
Mar 24 Soybeans are at $12.05, down 31 1/2 cents,
May 24 Soybeans are at $12.17 1/4, down 30 3/4 cents,
On the date of publication, Alan Brugler did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.