After Total Farm Marketing (TFM) reported yesterday morning that StoneX had reduced South American soybean production by 30 million mt, there was not another peep about that from TFM or anyone else. Remarkably similar to Bloomberg accidently posting on their webpage over the weekend that Russia had Invaded Ukraine.
The 14 day March soybean Relative Strength Index (RSI) was 82% soybean after bean open 4 cents lower last night. The 9 day RSI was 88%. Anything other 80% is grossly over bought and due for a major correction, but nothing is 100% in this business. If it was, we all would be rich.
Old crop beans could easily sell-off one dollar simply on a price correction… and still be in a technical uptrend. A reasonable person has to expect some major profit-taking before USDA US and World S&D numbers are released at noon Eastern Time on Wednesday.
Dalian (China) soybean meal futures traded limit up. Apparently, there are a lot of hogs and chickens in China, contrary to what some folks have said. Chinese crushers need to buy 22 to 26 million mts of soybeans to keep running through July.
Corn basis at the Gulf was 2 cents firmer yesterday for February, 1 cent firmer for March thru June, and 3 cents higher for Oct thru December.
Soybean basis at the Gulf was steady nearby, but 2 cents firmer for August and 5 cents higher for September thru November. All the more reason to be slow to sell new crop soybeans. Brazil will have plenty of beans to ship the next four months or so, but Brazil will run out of beans for export a month or two sooner than normal due to their short bean crop.
Tyson Foods’ earnings were better than expected as sales were up 23.6% from last year to $12.93 billion and net income was $1.12 billion, or $2.87 per share. The market expected $1.95 per share.
The Trend & Hedge Club of Keiv, Ukraine is presenting a webinar Wednesday, February 9th at 9 AM Central Time titled: Outlook of the Global Grains Market – Trade Flows, Supply Forecast and Price Trends. The presenter will be Nathan Cordier, of Argus Media, France. The webinar is free, but you must register at: https://www.trendhedgeclub.com/event-details/trend-hedge-club-09-02-22/form
Tech Tidbit from the Tech Guy: Seventy Year Price Chart of US Soybeans: My data shows we could be experiencing more of a generational event with these markets, inflation, macroeconomics etc.
ENSO Update
Yesterday's ENSO update shows Equatorial Pacific temperature continues to rise and is now solidly above normal. La Niña will come to an end in about 40 days. Will it end soon enough to allow Central Brazil's soybeans to harvested without terrible quality problems? Probably not. Will it end soon enough to allow normal rainfall to return to the dry areas of South America to save the crop? Probably not. Will it end soon enough to allow normal weather for Brazil's second crop of corn? Probably will. Will it end soon enough the US will have normal spring planting weather? Yes. Take a look at the chart below.
Exchanges
This morning: Crude oil is at $90.67, down 0.65 The dollar index is at 95.67, up 0.27 March palm oil is at 5502 MYR, down 120. The contract high was made yesterday at 5,876 MYR. Palm oil owns 32% and soybean oil owns 28% world market share. March cotton is at $125.32, down 0.25. The contract high was made February, 1st at $129.37 per cwt. Cotton competes with soybeans and corn for acres. March natural gas is at $4.303, up 0.071. The contract high was $6.132 at October, 6th, 2021. Natural gas is the primary cost to manufacture nitrogen fertilizer. March oats are at $7.38¾, up 0.02¾. The contract high was $7.78 made November, 22nd, 2021. Oats used to be thought the predictor of corn prices.
Export Inspections Tracker on Feb, 3
Rain Days Update
Rondonópolis, Mato Grosso, in the heart of Brazil's most productive soybean area, received 0.5 inches of rain yesterday; 0 inches a year ago and 0.5 inches two years ago (one inch = 24.5 mm). Yesterday's high temperature was 81°F. Day time highs the next ten days will range from 83 to 87°F (100°F = 38°C). Yesterday, in the dry areas of South America: Santa Maria high temperature 89°F with 0 inches rain. Cordoba high temperature 91°F with 0 inches rain. Salto high temperature 84°F with 0 inches rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 0.41 inches, 84 to 96°F. Cordoba 0.69 inches, 69 to 96°F. Salto 0.26 inches, 75 to 94°F. The Western Corn Belt has one more rain day than yesterday and the Eastern Corn Belt has two more rain days than yesterday.
Explanation of Rain Days