Following higher overnight trade, soybeans and meal extended the week’s gains through Friday, with soymeal again pacing the rally. The Argentine weather forecast shows limited rainfall over the next 10 days which is likely to keep planting progress to a minimum and stress growing crops. Commodity funds were estimated buyers of; 5,000 soybean and 3,500 soymeal contracts, while selling 2,600 contracts of soyoil.
IMEA, an agriculture economic institute in Brazil, estimated that soybean harvest progress in Mato Grosso had reached 3% this week versus 12% last year and the 5 year average of 7%. Planting this year was later due to dry October conditions, which has also pushed the harvest backwards. Of note is that the export lineup update shows 1.8 MMTs of beans scheduled to sail in January versus 1.2 MMTs a year ago.
The Commitment of Traders report showed as of Tuesday funds had sold another 10,500 soybeans for a net short postion of 103,000 – the largest since July.
We expect CBOT meal and soybeans to add premium until there is a change in Arg weather forecast. We target $10-10.20 March for the next cash sale. March soymeal has resistance at $345-350.00.
World vegoil values should be bottoming.
