Soybean Report, 05/25/2016

Thursday, August 25, 2016

Not even a bullish NC bean number could prop up beans prior to the break. Beans have finally climbed into 3rd place, but still trail 13/14 by about 3 MMT and last year by right at 6 MMT. Products did disappoint, especially oil, so that factored in a bit to the equation. OI in beans are about to fall below the 2nd spot it has held for some time now after relinquishing 1st place over the last 6 years. It could easily end up in 4th by next week with the long liquidation and lack of producer selling we are experiencing. Meal and oil continue to run right at the top of their OI chart with meal in second and oil eking out 1st. Weather not an issue. Crop tour not showing results to indicate any lower yields are to be expected, in fact they point to even better. Spreads are weakening on the prospects. Basis continues to ratchet higher as finding beans to fill crush contracts into NC are getting tougher and tougher to locate. Exporters probably can find a little more wiggle room with delays, but even that is minimal without discounting and losing some margin. That said, it might be cheaper than paying up for nearby. Bean harvest in the south being delayed or in some places eliminated is not helping the situation. This weather needs to change for fall harvest in the Midwest not to trail normal as well. Beans should continue to feel pressure of long liquidation as this crop is being put to rest.

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