- If there was any doubt that fund managers want to be on the long side of the soybean market, today’s price action in Chicago should provide clear notice. Funds have been buyers of the soybean complex from the get go with the grains trading either side of unchanged. March soybean futures has taken back all of Friday’s decline which was based on growing Brazilian soybean crop estimates. The ship line up for Brazilian soybeans is record large at the same time that the US is still shipping out 60 million bu per week. The message is that world soybean demand is robust which for now is countering the supply rise in the Brazilian harvest. Corn and wheat are following, but the recent moisture across the EU and price pressures on the ASW eastern Australian wheat is causing pressure on Chicago. The world wheat market is oversupplied, and without a new crop weather problem, rallies will be difficult to sustain. It feels, for now, as if the Chicago soybean complex is happy to maintain strength.
- Brazil is said to be opening negotiations with Mexico over soybeans and meat according to Brazil’s ag minister Maggi. Mexico is looking for alternatives to US grain, soybean and meat based on the US Trump Administration’s posturing over NAFTA. Brazil is said to be open to selling/exporting more food products to Mexico if the US alters trade policy.
- China’s return was felt overnight as their Central Bank did not raise interest rates. This “no move” sparked a fresh push of investment in commodities. We would note that seasonal corn/soybean price trends turn higher next week and a record large Brazilian soybean crop is being buffered by record large world oilseed demand. With the USDA report anticipated to be neutral/supportive on Thursday, we would caution against turning overly bearish with US and S American farmers remaining tight fisted with stored supplies. CONAB is scheduled to release their updates on Thursday morning.