- The morning has been mixed in Chicago with soybeans trading to a new rally high while the grains trade either side of unchanged. The strong seasonal price trends for the day ahead of Thanksgiving appear to be working. Funds have been active in buying soybeans/soymeal and selling of the grains. The oil share traders have been unwinding their long soyoil and short soymeal spreads which is adding to the upside vigour in the marketplace Producer selling is lax from the US, but stepping up in S America with the Brazilian real priced at 3.245:1 vs the US$. The wheat market is giving back a portion of Tuesday’s Russian radiation gains based on the lack of impact on world grain production going forward. Our inclination is for a mixed Chicago close heading into the holiday.
- Brazil is offering soybeans, soymeal and soyoil for export during December and January. Seasonally, Brazil is normally sold out in this position, but last year’s record large soy crop harvest is helping to keep Brazilian soy products flowing. We would note that Brazil is offering fob meal at $26 under Chicago with the US Gulf at $9 under. Brazilian soymeal is $17-18.00/mt cheaper than the US Gulf. And Brazil is offering soyoil at $32/mt discount. Brazilian soybeans are offered at a $6/mt premium, but Chinese crushers prefer the higher quality Brazilian soybeans and there is a freight advantage vs. the US Gulf. Brazil looks to export some 2.7 million mt of soybeans during December according to the freight line-up.
- Chicago brokers estimate that funds have bought 6,000 contracts of soybeans and 2,000 contracts of corn, while being flat in wheat. In soy products, funds have bought 5,400 contracts of meal and sold 2,100 contracts of oil. It is all about chart based buying today, December options expire on Friday and short holders are also securing futures to cover their risk.