Tuesday November 19, 2024

• Markets are mostly green to start off the week. Wheat is leading the gains.
• China has cut their used cooking oil (UCO) export tax refund, which caused export sales to halt on Friday. The rebate is set to end on 12/1. This is major news for the soybean oil market. The US has been importing massive amounts of UCO for use in biofuels. The amount of UCO imported so far in 2024 replaced the oil from 332million bushels of soybeans. This caused the soy complex to rally.
• NOPA October crush beat expectations coming in at 199.96mbu vs the estimated 196.8mbu. This is up from last months 177.3mbu. We are only 2 months into the new marketing year, currently crush is up 22mbu from last years pace (see chart below). The USDA is expecting a 5.4% increase y/y in soybean crush demand.
• The funds substantially expanded their net long position in the corn market last week. 
• Last week soybean export sales were disappointing relative to expectations. There is some talk that China could cancel existing US purchases if Brazilian weather continues to cooperate.
  • China accounts for 45% of all US soybean export sales, marketing year to date.
• We will likely see US Winter wheat ratings make another improvement when the USDA crop conditions come out this afternoon. Rain continues to make its way across US winter wheat production areas.