Farmer's Report

April 19, 2019

The soybean complex closed slightly lower last week, as the focus of the trade slowly shifts toward domestic planting progress. The major snowstorm snarled grain movement, and forced some northern tier elevators and processing plants to close down for a few days.

Last week’s monthly USDA supply/demand update held no major surprises for the soybean complex. 2018/2019 soybean ending stocks were lowered by just 5 million bushels, but remain at a record high 895 million. Soybean oil ending stocks were lowered by 150 million pounds, as demand for biodiesel continues to improve. Next month’s report will carry more weight, as we get our first look at the USDA’s take on 2019/2020 balance sheets.

South American soybean production totals continue to move higher as the harvest wraps up in Brazil. The Argentine harvest is now reported at 15% complete, with output expected near 56 million metric tons compared to 37 MMT last year. (There was a major drought in 2018.)

Total Chinese soybean imports were just 4.9 million metric tons in March, down 13% from last year, and the lowest for the month of March since 2015. U.S./China trade talks are ongoing, but we still have no hard date for a signed agreement. Most believe it will come to fruition in May.


  • The May soybean oil contract continued to consolidate, trading in a narrow 37 point range. Technical indicators remain in neutral territory for now, with first resistance at the $.2950 level, and a close under $.2850 required to turn the trend lower.
  • Crude oil prices made new highs last week, trading up near the $65 per barrel level. The market has now rallied nearly 50% from the December 2018 low, helping to add underlying support to the soybean oil market.
  • The U.S. Environmental Protection Agency could grant fewer waivers to small refineries exempting them from the country’s biofuel policy, according to the agency’s administrator. He cited lower prices for blending credits that have reduced the cost of compliance.
  • Soybean oil basis levels were mostly steady, with offers averaging -0 to -25 in the East and at -50 to -75 in the West through Q2, and at -50 East and -100 West for Q3.


The strained relations between Canada and China continue to overhang the canola seed futures market. Statistics Canada will release their first planted acreage estimates on April 24 and the trade will be interested to see how much, if any, canola acreage expectations are lowered, based on the mini-trade war. Canola basis offers were steady, posted at +675 for Q2, and +700 for Q3, 2019.


The palm oil market reacted negatively to the latest Malaysian Palm Oil Board update that showed end-of-March stocks came in at 2.92 million metric tons, down 4.6% from February, but still higher than trade expectations. Export business does seem to be picking up, however.


Weekly soybean oil export sales came in at 33,800 metric tons, above the higher end of the range of trade expectations between 10,000 and 30,000 metric tons.