Downside Soybean REVERSAL: Big Deal or No Deal??

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📈 Soybean & Corn Futures Hit Fresh Highs, Then Pull Back
The Nov24 soybean contract reached a new high of $10.65 per bushel on Thursday before closing lower at $10.41. Here’s the breakdown:
Early optimism around Chinese stimulus was likely behind the initial surge, but hedge pressure late in the session led to a retreat.
Corn futures followed a similar pattern, with the Dec24 contract peaking near $4.19 before closing lower.
Position-squaring could be in play today ahead of Monday’s USDA Grain Stocks report.
💸 US Treasury’s Take on China’s Stimulus Efforts
Jay Shambaugh, the US Treasury's top international official, believes China needs to do more to stimulate its economy. Despite China’s recent interest rate cuts, Shambaugh suggests:
China’s high savings rate creates an imbalance, leading to overproduction of goods and insufficient domestic demand.
Overnight, China confirmed additional stimulus measures that had been rumored earlier.
🌾 USDA Grain Stocks Report Preview
Corn stocks as of September 1st are estimated to be 36% higher than last year.
Soybean stocks are expected to rise 32% year-over-year.
Wheat stocks likely increased by 12% compared to the same period last year.
There may be some discrepancies between these estimates and USDA's most recent projections for old crop carryouts. 🕵️‍♂️
🌦️ Russia’s Wheat Crop Estimates Cut
Russia's IKAR agricultural consultancy has cut its wheat crop estimate:
New projection is 81.8mmt, down slightly from 82.2mmt.
Total grain production is now estimated at 124.5mmt, down from 125mmt due to excessive rainfall in eastern regions.
🚢 Disappointing US Corn Export Sales
Last week’s new crop US corn export sales fell below expectations:
Net corn sales totaled 535,100mt (21 million bushels), down 37% from the previous week. Colombia was the top buyer.
Soybean sales hit 1.6mmt (58 million bushels), near the upper end of expectations but still -10% from the prior week. China was the largest buyer.
Wheat sales disappointed, hitting a marketing-year low of 158,900mt (9 million bushels), down 36% week-over-week. Chile was the largest buyer.
💧 Drought Monitor Update
The USDA's latest drought monitor shows mixed conditions across the Corn Belt:
Improvements: Missouri and Illinois saw some drought relief due to scattered rainfall.
Worsening: Ohio, Minnesota, Nebraska, and Kentucky experienced deteriorating conditions.
🔢 US Areas Experiencing Drought:
Corn: 25%
Soybeans: 30%
Winter Wheat: 50%
Spring Wheat: 18%
Cattle: 32%
🚜 Flash Sale of Corn to Mexico
On Thursday, the USDA reported a flash sale of 115,000mt (5 million bushels) of corn to Mexico for the 2024/2025 marketing year.
#SoybeanFutures #USDAReport #ChinaStimulus #CornExportSales #DroughtMonitor #AgNews