Following firm trading overnight, soybeans extended gains on improved export demand. Commodity fund traders were estimated buyers of; 3,000 soybeans, 1,000 soymeal and 2,000 soyoil contracts.
Ahead of the morning open, the USDA announced old crop export sales totaling 132,000 MTs to China and another 960,000 MTs to unknown, with another 120,000 MTs of new crop soybeans also to unknown. The chart plots net soybean sales announcements (old & new combined) since March. Note that announcements have accelerated since Aug 1, with a total of 27 transactions for new crops soybeans, totaling 4.75 MMTs. Tuesday’s combined total of 1.21 MMTs was the largest since July, which was directly following a Chinese framed contract signing ceremony is Des Moines.
World demand remains strong, with summer demand figures up 10% over last year. We caution against turning bearish amid US yield uncertainty and the drier start to the S American planting season. US biodiesel demand will absorb any excessive soyoil supply. Bearishness has to be totally based on soymeal.
