Beans are the bright spot on the CBOT feed this morning as we have nearby futures pressing up against recent highs, while corn and wheat backtrack yet again. No doubt, ideas of more Chinese demand have emboldened the bulls, but we do have a couple of other factors at work as well. Extended weather forecasts suggest that August temperatures and rainfall may not be conducive for beans and COVID related labor shortages in Malaysia have created a significant issue for the palm harvest. The government has placed a freeze on the recruitment of foreign workers who are customarily brought in from Indonesia and Bangladesh, which has intensified an already tight labor situation, and some project that up to 25% of the crop could be lost. This morning the bean oil market has moved into higher highs again after a very impressive performance last week, and we have now reached back to the highest point traded since February. It is interesting to note that during the week ending the 14th of this month, large speculators sold over 14,000 contracts of soy oil, leaving them net short nearly 10,000 contracts, but managed money was still long, just over 10,000 contracts.
During that week, large speculators continued to lighten their short positions in the grains as they were buyers of over 19,000 corn and 45,000 contracts combined in Chicago and KC wheat but were sellers of more than 35,000 beans and 7,800 meal.
We do have new export sales to kick off the week as well. China has purchased another 132,000 MT of beans for the 2020/21 crop year.
At a few trial plants, both JBS and Tyson Foods are experimenting with new air filtration technology to try and control the spread of coronavirus. Labeled as “ultraviolet germicidal air sanitation” the system evidently uses light waves to attempt to kill germs. No doubt, if the tests prove successful, it will be expanded to additional facilities. JBS is also experimenting with “plasma air cleaning technology” and in Germany, at least one meatpacking operation has installed the type of high-efficiency air filter used in hospitals.
Here are the Sunday evening 6 to 10-day weather maps. Make sure you have that air-conditioning unit in good working order.