January Soybeans stayed in a 24-cent range this week but closed strong off support from export sales and soybean meal prices, which made new contract highs. Strong domestic crush margins and unusually high export sales of soymeal are driving those prices higher. ADM’s CEO said this week that Argentina could run out of beans to crush in November.
Source: Bloomberg
At an event in Iowa on Monday, a delegation of agribusiness leaders from China signed a letter of intent to purchase US agricultural products. It is common for China to sign these “framework contracts” which indicate their intention to buy significant amounts of US goods, but these agreements are not binding. China had not had any delegation visits since 2017 due to US/China political disagreements, so this visit is more significant than previous ones. Specific dollar amounts were not indicated, other than the contract was worth billions. US Agriculture Secretary Vilsack said this week that the US will spend $2.3 billion to promote US farm exports and to send grain to countries that are suffering food shortages. USDA also confirmed several cargoes of US beans bought by China this week. Weekly export sales were very strong, with China accounting for 85% of the total. Dwindling bean supplies in Brazil are opening a window for US exports, and US prices are competitive. US soybean meal exports are expected to continue to outperform through the winter, as Argentina’s soybean supplies will not be replenished until next spring.
Source: NOAA
Fall weather will arrive in the US Midwest this weekend, with temperatures plummeting to below normal and a chance of snow in the northern Plains. Good rains will move through the eastern Corn Belt over the next several days, resulting in harvest slowdowns but improvements in Mississippi River levels. Barge shipments on the Mississippi rose 13% this past week, partly due to the need to fill boats as demand picks up. We expect to see support on pullbacks in January Soybeans.
Source: Bloomberg
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Originally Published October 27, 2023
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