Soybean Report, 08/02/2016

Tuesday, August 2, 2016

Oil attempting to make a stand at 30 cents, we will see if it can hold. Kind of feels like the Alamo to me. Beans and meal taking a hit again as rains in the hottest area should keep ratings at excellent to best ever heading deeper into Aug. for the whole US. Spreads weaker as we see the potential for this crop from two sources yesterday afternoon at 3 pm. First, USDA said bean condition improved 1% on good-excellent for a contra-seasonal move and secondly INTL FCStone’s first estimate of the year showed expectations of a 48.8 yield for beans which projects to a 4.054 BB crop. That will absorb some increased export demand and domestic usage as well. Both should benefit from lower prices which seem destined at the moment. Only a major break in the US$ could derail that train as things stand. Spreads are weaker and would seem destined to go to a carry with corroboration on this kind of yield. USDA will be out on Friday Aug. 12th so we have over a week of other estimates to wade through. The most movement so far has been in the XN. XX should see even more as we move forward. The wild card to sell into a hole is the dioxin story in China that may allow them to bail on high priced contracts once again. Deliveries were 75 again in meal and only 910 today in oil. Look for a chance to move to the positive side with a weaker US$ and day traders on board, but the long term effect of this crop condition and possible size will keep pressure on the last long positions to liquidate and probably get short for a while.

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