SOYBEANS: HIGHER
The market is trading higher as the day unfolds. Deliveries in bean oil are down to 462 today. Exports on beans again exceeded expectations at 760 TMT, pretty evenly split between new and old crop shipments. Meal and oil exports were on the low end of the range. The tight world situation is the driving force that will not go away. Until demand is rationed by price, which the report shows has not yet occurred in beans, we will still have upside prospects. The current weather and forward projections are negative to yield and positive for price. The ripple effect of lower bean production will be felt across the dairy and meat industries in the coming years. The lack of good cheap protein will negatively affect output in dairy cows, raise the cost of gains in all meat, and likely lower finished weights. The heat is the double whammy as it acts as an output reducer and declining efficiency factor. It was a bullish OI day. The whole complex saw open interest register positive ticks. Basis has been pretty solid from a seasonal standpoint, but has definitely seen volatility as push only occurs when the need is dire. Lack of carry has kept bids to only needs covering, even in an environment where finding the next load becomes dubious. The spreads have been trading in a sideways pattern with some weakness. The inverses are still a severe punishment to the long cash holder, just a freckle less due to the weakening. OI: B +16,433; M +2,120; O +2,472. Continued heat and less than desired moisture to offset the heat will keep the complex bullish.

Kyle Smith, Mike O'Dea, Ben Parks, Collin Hulse, Ingrid Gronlund