The rally is being trimmed this morning. Decent weather is in the offing to help the crop produce at expected levels and, with ideal conditions, maybe add a few bushels. Even then, we will still be in rationing mode to make it into the next crop year or import beans and/or meal next summer. Consumers will soon turn their focus to SA and the planting progress in northern Brazil and the ensuing march southward of the planting season. Anything less than record acreage and production will send this market into a feeding frenzy later this fall/winter. We will bide our time adjusting to yield reports, the next USDA issuance, and the Sept 1 stocks report. Open interest was again lower in beans and there was a drop in oil yesterday as well. Meal bucked the trend and added some open interest on the drop in price, as well it should. Meal end users should be taking advantage of the inverse and booking cheaper deferred meal. In an interesting development, 51 contracts of beans were delivered after Aug went off the board. Oil finished the trading with 257 deliveries. Basis has processors out hunting for DP and basis ownership to get them through to the new crop beans. This should develop into a pretty good basis bump for the elevator. The spreads continue to tell one to merchandise from the short side of basis using DP and basis contracts. OI: B -2,752; M +960; O -3,268. Both sides could prevail as other markets are struggling to stay above water.
Kyle Smith, Mike O'Dea, Ben Parks, Collin Hulse, Ingrid Gronlund