Soy futures rallied to strong gains at the start of the week as concerns for Argentine crops accelerates. Soymeal led Monday’s rally, gapping higher overnight and breaking out of a longer term consolidation pattern to mark the highest close since July 2016. Soybeans followed along and rallied 18-19 cents, but did not keep up with the meal rally, which put nearby crush spreads up more than $.10.
Funds were estimated buyers of 17,000 soybean and 13,000 soymeal contracts through the day. Based on Monday’s buying, we estimate that funds are now very close to flat in soybeans and long 75-80,000 contracts in soymeal.
Soybean export inspections again ticked higher to 48.5 Mil Bu for last week, while the cumulative total holds nearly 206 Mil Bu behind a year ago. The USDA also announced that China cancelled close to 0.5 MMTs of old crop export sales, though much of that cancellation was offset by sales announcemnts to unknown destinations.
The Argentine forecast stays dry over the next 5 days, while the EU forecast shows far less rain than the GFS in the 6-10 outlook. Our view stays bullish as Arg crops roll back.