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Weak oil, bullish beans push BOGO upwards

Conflicting signals from US agricultural and oil data have nudged front month bean oil/gasoil spreads into the $180s/t this morning, up around $10/t compared to Friday’s open. Friday’s WASDE confirmed a 50mn bu cut to USDA’s soybean ending stocks. This was smaller than the 95mn bu cut surveyed before the report’s release, driven by a reduced estimate of starting stocks and despite an upgrade to production and static yields following damaging June rains. USDA is expecting growth in soybean export demand as well as the domestic crush, with Chinese 1H 2015 bean import data confirming a 2.8% rise YoY lending support to USDA’s expectations. US and Canadian oil rig counts meanwhile continued to rise WoW, doing little to dampen US crude oil production prospects. IEA last week forecast a 15% global demand slowdown next year to 1.2mn b/d. Global output in June was up 3.3% YoY.

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