Soybeans close 20¢ lower. Thursday, February 10, 2022

On Thursday, the CME Group’s soybean complex turned negative, pushing down all ag markets.

At the close, the March corn futures closed 5¢ lower at $6.41. May futures ended 5½¢ lower at $6.40. December futures settled 3¾¢ lower at $5.84.

March soybean futures closed 20½¢ lower at $15.74.

May soybean futures finished 19¢ lower at $15.76. New-crop November soybean futures ended 5½¢ lower at $14.32.

March wheat futures closed 13½¢ lower at $7.71.

March soymeal futures closed $7.90 per short ton lower at $454.00.

March soy oil futures closed 0.41¢ higher at 64.51¢ per pound.

In the outside markets, the crude oil market is $0.05 per barrel higher at $89.71, the U.S. dollar is lower, and the Dow Jones Industrials are 438 points lower (-1.23%) at 35,329.

PJ Quaid, R.J. O’Brien broker, says that today’s high volume-based soybean break occurred due to trade rumors.

“Conab, (Brazil’s governmental agency) got the ball rolling early this morning (dropping Brazil’s soybean production estimate). And, the market broke late on rumors of China canceling Brazil soybeans. Conab is usually conservative, so when it dropped its soybean numbers, it really opened a lot of eyes.”

On Thursday, the CME Group’s soybean market has pulled back, but remains high.

At midsession, the March corn futures are 6½¢ higher at $6.53. May futures are 6¢ higher at $6.52. December futures are 5¢ higher at $5.93.

March soybean futures are 7¾¢ higher at $16.02.

May soybean futures are 8¾¢ higher at $16.04. New crop November soybean futures are 14¢ higher at $14.51.

March wheat futures are 4¼¢ lower at $7.80.

March soymeal futures are $0.60 per short ton lower at $461.30.

March soy oil futures are 1.19¢ higher at 65.29¢ per pound.

In the outside markets, the crude oil market is $1.77 per barrel higher at $91.43, the U.S. dollar is lower, and the Dow Jones Industrials are 89 points lower (-0.25%) at 35,678.

On Thursday, the CME Group’s soybean market is being powered by cuts in crop estimates and demand.

In early trading, the March corn futures are 3½¢ higher at $6.50¾. May futures are 3½¢ higher at $6.49. December futures are 5¢ higher at $5.93.

March soybean futures are 24½¢ higher at $16.19.

May soybean futures are 26¢ higher at $16.21. New-crop November soybean futures are 23¢ higher at $14.60.

March wheat futures are 9¼¢ higher at $7.94.

March soymeal futures are $8.40 per short ton higher at $470.30.

March soy oil futures are 0.97¢ higher at 65.07¢ per pound.

In the outside markets, the crude oil market is $0.19 per barrel lower at $89.47, the U.S. dollar is higher, and the Dow Jones Industrials are 257 points lower (-0.72%) at 35,535.

On Thursday, private exporters reported sales of 299,700 metric tons of soybeans received during the reporting period for delivery to unknown destinations. Of the total, 233,700 metric tons is for delivery during the 2021/2022 marketing year and 66,000 metric tons during the 2022/2023 marketing year.

Separately, the USDA’s Weekly Export Sales Report Thursday shows strong demand figures for corn and soybeans.

Corn = 589,100 metric tons (mt.) vs. the trade’s expectations of 500,000 to 900,000 mt.

Soybeans = 2.49 mmt. vs. the trade’s expectation of 925,000 mt to 2.5 mmt

Wheat = 133,200 mt. vs. the trade’s expectation of 125,000 to 600,000

Soybean meal = 239,200 mt. vs. the trade’s expectation of 200,000 to 500,000

Bob Linneman, Kluis Advisors, says that because yesterday’s USDA reports had no surprises in them, investors turn their attention to trade news.

“Rumors are floating around that China is expected to buy upwards of 2 million metric tons of U.S. corn. This is interesting, since China cancelled U.S. corn last week. Also, the grain bulls need to consider that soybean premiums (in other words, the cash market) in Brazil are falling. That is not a bullish sign,” Linneman stated in a note to customers.

Linneman added, “In yesterday’s report, the USDA cut Brazil soybean production by 5 million tons, down to 134 million. The trade is currently estimating that number to be between 125 and 130 million, with a downward bias. Many traders did not expect the USDA to drop their numbers that far in this report. That is why futures still ended strong after a somewhat neutral report.”

“The USDA report on Wednesday did not have any major surprises compared with the pre-report estimates. There were no changes to the U.S. balance sheet for corn. Soybean ending stocks decreased by 25 million bushels and wheat stocks increased by 20 million bushels. WASDE data showed that world soybean ending stocks were cut to 92.8 million metric tons. Analysts and traders believe this number is closer to 85 million metric tons, given the current outlook for South American production,” Linneman says.

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