Commentary
Bearish news on a few fronts did in beans today in my opinion which led to Soybean prices giving back all of yesterday's gains and then some as funds continue to press the short side of the market. First rumors were swirling overnight and into the morning that China may be on the cusp of releasing 1 million metric tons of reserve soybeans onto the cash market. The rumor could not be confirmed, but it pressured Chinese futures last night. Chinese soybean imports are expected to drop 4 mmt below year ago levels in the first quarter, based on shipping commitments in my view which may provide justification for the release of reserve soybeans. This could pressure Brazilian offers further into China with US futures following lower in tow. Second, Brazil’s port basis offers dropped another 10 to 12 cents per bushel today after firming Friday and Monday. Agroconsult one of the crop scouts in South America, with 60% of its crop tour complete, cut the crop to 152.2 million metric tons. This is still a sizable crop, despite recent downgrades from other private forecasters. The only friendly tidbit I could find for price was that the Rosario Exchange cut the Argentina crop based on the dry pattern of the last 30 days. The crop is put at 49.5 mmt vs 52 mmt last month. Technically we have done some damage. May 24 beans coincidentally have dropped near their lows last May at the 1150 level. Beans like corn and wheat need a story for a significant turnaround in my opinion.
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