Recent Export Sales: Soybeans only had four strong weeks of interest. They ran +15% to +105% from the five year average. But last week slipped to -7% vs. average. We need to run at least -3% from here on out to meet USDA's goal. Given that Brazil holds a price advantage we have concern even before a potential trade policy change.

Export Sales on Tomorrow's Report: The 1.0 - 1.6 million tonne estimate range is -7% to +104% from the 1.592 five year average. There was only one overnight sale for this period, 176,000 tonnes. This report will confirm two weeks of disappointment. We are -25 million bushels from USDA's whole-year goal and will consider further reductions in the coming months.

Exports Sales on Next Week's Report: Positive, we now have three overnight sales this week. Including today's 202,000 sale to Chinese buyers and 226,200 to Unknown, the week so far totals 689,464 tonnes. We may lightly exceed the five year average for that week, 1.300 million tonne.

The lower Mississippi River recently crested at +7.3 feet stage height. Current conditions have fallen to +3.2. It is forecast to drop to -2.2 by December 4. Over the coming two weeks there will be no barge restrictions (-5.0 and below). This is the peak shipping time for US soybeans.

Export Narrative: The new administration's views on trade policy are still weeks away. Despite all of the campaign rhetoric, we really don't have an idea yet at this time of what actually may happen. For trade and tariffs, China and Mexico are the countries of focus. Soybeans have significant export concern. Trump's first two years in office saw clear disruptions. In the completed 2023/24 crop year we shipped China 917 million bushels. Trump has also discussed tariffs for China of 60%.

Abiove, the Brazilian oilseed association, estimated the coming 2025 soybean harvest at 167.7 million tonnes. This is between USDA's current 169 view and Conab's 166.14. They also see an export of 104.1 mt, over this year's 98.3. USDA's export view is 105.5. All of these production estimates would be a new record and over the prior year's 153.0 harvest (USDA).

On Friday the Chinese government was said to have scrapped an incentive used to help export used cooking oil. The discussion was that they would eliminate their 13% export tax report on used cooking oil starting on December 1. This applies specifically to chemically modified animal, vegetable or microbial oils and fats under HS code 15180000. There was also a discussion that they would lower export tax rebates from 13% to 9% of some other refined oils. In recent months China has been as much as 46% of our processing oil imports.

As a reminder, the trade is also suggesting the coming administration may raise US import tariffs. Some hope that could put up a minor roadblock for some vegetable oil imports.

South American Narrative: Brazil weather is okay. Yield determination is generally in January. Argentina is lightly dry. Yield determination is January/February.

Brazilian rains totaled 0.7 inch last week in the soybean area. That was under the 1.5 average. The next two weeks will see strong 2.0 - 4.7 inches. The average over two weeks is 3.0.

Argentine soybean areas only saw 0.3 inch last week. The norm is 1.0. The next two week rains will run 1.2 - 2.4. The norm for these two weeks is 2.0.

Though US soybean basis has eased recently, the current -0.31 per bushel reading as of November 15 is still quite a bit off the -0.54 low at harvest. Additionally, it is still better than the comparable heavy supply years at this point, -0.41. Even in heavy supply years there is typically another 0.17 of improvement into mid-January.

USDA this month lowered US ending stocks a bit more than expected, 550 million bushels last month to 470. Yields were lowered from 53.1 bpa to 51.7. That -2.6% yield hit was the most severe seen for a November report since 1993. The message is that this year’s dry Aug/Sep moisture, the lowest of at least 24 years back to 1980, was a more severe yield hit than expected. We have no strong confidence about the US export picture. It could end anywhere from -400 million bushels to -25 million bushels from USDA’s current view.  Our models imply this stock level could imply 1060 for futures pricing. We fully expect prices to trade below that value measurement until we see concrete trade policy established. That could be several months away.

Retail level pricing growth, as measured by the Consumer Price Index, lightly ticked up from +2.4% year over year in September to +2.6% in October. That was on the trade expectation. The trade sees a 75% chance at a December 18 interest rate cut from the Federal Reserve.

As expected, on 11/7 the Federal Reserve's policy making board lowered short term interest rates another -0.25%. Their target range is now 4.50% - 4.75%. The decision was unanimous among voting members of the board.

Pricing: USDA currently estimates 470 million bushels for ending stocks, Allendale 478. Allendale's pricing models suggest 400 million ending stocks implies 1110 futures, 450 implies 1080, 500 implies 1040, 550 implies 1005 and 600 implies 975. We have strong concern that this balance sheet is quite fluid. Exports could be reduced by 100 million. We expect pricing to remain under valued for several weeks until trade policy is clarified.

Chart: Soybeans are in a sideways trade for three months. The near term trade is clearly lower. The recent post-election rebound failed to post a close back above 50% retracement of this sideways trade, 1030 ½. There are three main areas of chart support to keep an eye on that are all quite close to each other. They are the recent lows of 982 from 11/6, 977 ¼ from 10/30 and the major lows of 973 ½ from 8/14. A retest of those lows looks likely...Rich Nelson

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