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Commentary

The soybean complex in my opinion had the China-US trade negotiations provide a headline to keep the bears at bay today. There were a few whispers of potential progress that President Trump echoed as the trade talks with China continue. There was also handshake agreements regarding rare-earth metals gave the market something to be hopeful about. Bean imports into China were announced and they were massive. China imported a record 13.92 million metric tons (511 million bushels) of soybeans in May, up from the previous high of 12.02 million metric tons in May 2023. April to May imports total 20 million metric tons, up 6.4% from the previous year's pace. The bulk of those soybeans came from Brazil. Chinese soybean imports from January to May total 37.11 million metric tons (1.364 billion bushels), down 0.7% from the previous year's pace due to low imports from the United States over the winter that it is now making up for with massive shipments from Brazil. It goes to show in my view that no matter how many bushels Brazil grows, China will take them all. That could set the stage for a rally this Summer if it turns hot and dry Mid-July through August. Last week's US inspections came in as follows. U.S. exporters shipped 20.1 million bushels to other countries during the week ending June 5th bringing the cumulative marketing year-to-date total to 1660.4 million bushels.  The USDA estimates the U.S. will export 1850 million bushels during the 2024/25 marketing year. Currently, we've inspected 90% of that total.  Typically, at this point in the year, we've exported 87%, so we are 3% above pace. Mexico, Japan, Egypt, and Indonesia each took over 3 million bushels of soybeans during the week ending June 4. The average trade guess for ending stocks in soybeans for this Thursday’s crop report is 351 million bushels for old crop. The range of guesses is tight at 340 on the low to 375 million on the high. For new crop, the average trade guess is 298 million bushels. That is up 3 million from last month with a range of 285 million to 335 million. With less bean acres planted that could end up over three million less acres harvested versus last year, it won't take much in my view for a fund inspired weather premium rally in soybeans. 

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Sean Lusk

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