It was an inside day of trading in the soybean market that left both old and new crop futures above unchanged, but well under the early highs. Weather continues to hold the trade’s attention, with current dry conditions put against a wetter forecast that has rains falling across the entire Cornbelt in the last half of the week. Commodity fund traders were estimated sellers of 2,000 soymeal contracts, buyers of 4,000 soyoil contracts, and were flat in soybeans.
Malaysian palm oil production continued a seasonal recovery through the month of May and was 21% over a year ago and well above the 5 year average. Exports reached a 19 month high of 1.5 MMTs which pulled stocks slightly lower from April, and end of month stocks of 1.56 MMTs was the lowest May stocks figure since 2007. However, production and stocks figures were generally near expectations, and palm oil futures sold off following the report.
US crop ratings on Monday were just above the long term average, but also the lowest in a decade. At this time, we think that the USDA’s yield estimate of 48 BPA is reasonable – with nearly the entire growing season still ahead. It takes a 5% drop in the US soybean yield potential to justify $10-10.25 spot CBOT
