Ag Market View for August 13.25

SOYBEANS

Prices were higher across the complex with beans up $.10-$.12, meal was up $5-$6 closing at session highs, while bean oil was 15-30 points lower.  Bean and oil spreads eased while meal spreads firmed.  Nov-25 beans shot up to a 6 week high, filling a gap from around the 4^th of July in the process.  The 50 and 100 MA’s just below $10.25 will now serve as support.  Sept-25 bean oil may be carving out a short term range between $.52-$.54 lbs.  Despite the late rally still an inside trading day for spot meal.  Speculative traders likely paring back what was a record short position.  Spot board crush margins rebounded $.02 ½ to $1.94 ½ bu. while bean oil PV slipped to a 2 month low at 48.2%.  US weather remains mostly favorable but not perfect as there are some growing area of dryness in the Ohio Valley and Delta region.  Precipitation into early next week will continue to favor the NC Midwest while scattered rains will impact the SE.  Rainfall will be minimal in the S. plains stretching into the central Midwest.  Above normal temperatures in the S. plains will shift into the Midwest by this weekend.  Since 1990 soybean yields were raised in the Aug report 14 times.  In 9 of those years yields were again raised in Sept. while they were cut 3 times and left unchanged twice.  History would suggest higher bean yields moving forward.  As expected, Pres. Trump earlier this week extended the current trade truce with China, likely delaying their transition to buying US soybeans.  FOB prices for US soybeans are roughly $40 per ton below Brazil for fall shipment but when you add in the 23% tariff into China those US beans become $50 over Brazilian.  Soybean stocks/use among global exporters jumped from 19.5% to 20.2% for the 24/25 MY largely due to a 1 mmt increase in Argentine production to 50.9 mmt.  New crop 25/26 increased from 18.9% to 19.4%.  Tomorrow’s export sales are expected to range from 22-58 mil. bu. for beans, 150-500k tons of meal and 0-20k tons of oil.