Soybeans Everywhere, But They're Not Necessarily For Sale!
21/04/15 -- Soycomplex: Beans ended with small losses. The prospect for a possible Brazilian trucker strike later in the week is supportive for old crop, where US sales have almost reached 100% of the USDA forecast for the season with more than 4 months of it still remaining. Recall that more than 92% of the USDA's 48.7 MMT export forecast for 2014/15 has already been shipped and isn't at risk of getting cancelled or carried over into next season. The market therefore remains sensitive to anything that might trigger a demand shift back to US origin. It is probably only a matter of time before Argentine truckers and dock workers eye an opportunity for a bit of industrial action themselves. Dr Cordonnier was said to have raised his forecast for the Argentine 2015 soybean crop by 1 MMT to 59 MMT, due to the exceptional yields that are being reported from what's been harvested so far. That puts him 2 MMT ahead of the USDA, although not out of line with other trade estimates. There's talk too of Brazil's crop maybe making 97 MMT eventually versus the USDA's 94.5 MMT estimate, say Benson Quinn. These figures would be all time highs for both countries. With an Argentine election coming up in October though, Bloomberg report that soybean farmers there are more inclined to hold onto as much of their inventory as possible, rather than cash it in now, on expectations that the winning candidate will devalue to Argentine peso. Argentine farmers are said to have bought enough silo bags, the common on-farm storage solution there, to store 50 MMT of soybeans this year. Could it be that the world is awash with soybeans in 2015, it's just that many of them aren't actually for sale? May 15 Soybeans closed at $9.75 1/4, down 2 1/4 cents; Jul 15 Soybeans closed at $9.76 3/4, down 2 3/4 cents; May 15 Soybean Meal closed at $315.80, down $2.70; May 15 Soybean Oil closed at 31.82, up 23 points.
Corn: The corn market closed with losses of around 4-5 cents. Reports of a bird flu outbreak at a farm in Iowa with a flock of more than 5 million chickens was seen as bearish. "Additionally the governor of Wisconsin declared a state of emergency and called in the National Guard to help curb the spread (of the disease) in their state," said Benson Quinn. Dr Cordonnier was said to have increased his forecast for the Brazilian corn crop by 2 MMT to 77 MMT versus the USDA's 75 MMT estimate, citing increased usage of superior hybrid seeds, He also upped Argentina by 1 MMT to 24 MMT, which now puts him in line with the USDA. The Argentine government were said to have authorised a further 3.5 MMT of corn for export. That adds to the 8 MMT that they've already cleared, as confidence grows in the size of this year's crop. Spain were said to have imported 552.6 TMT of corn in February, a 35.2% increased versus Feb 2014. Ukraine was the top supplier, with 262.1 TMT, followed by France at 122.1 TMT. Ukraine farmers are said to have planted 215k ha of corn so far this spring, or around 5% of the official Ministry forecast. Corn planting is also now underway in southern Russia. China released an official ten year Agricultural Outlook for 2015-2024, similar to the USDA's baseline projections. They said that they don't expect China's corn imports to rise above 7.2 MMT between now and 2024 as long as their domestic stocks remain adequate. Chinese corn planting is forecast to rise 1.9% this year, with production officially estimated at close to 220 MMT (record) versus 215.7 MMT last year. The state are said to be looking to continue to build on their vast corn reserves again this season. Meanwhile, weather conditions are said to have rapidly deteriorated in the Midwest, turning sharply colder. "The 7-day temperature outlook is very cold, indeed, 12-15 F below normal. Rainfall in the upcoming weeks is predicted to be less than average, especially the Upper Midwest," said Martell Crop Projections. May 15 Corn closed at $3.73, down 5 cents; Jul 15 Corn closed at $3.80, down 4 3/4 cents.
Wheat: The wheat market closed higher on all three exchanges. Last night's unchanged US winter wheat crop ratings may have prompted a bit of short-covering, with the average market guess being for a 2 point increase in the good to excellent category. Ag Canada cut their forecast for the Canadian all wheat crop slightly, down from 29.6 MMT to 29.5 MMT. They see exports in 2015/16 at 22.4 MMT versus 22.9 MMT this season, and forecast ending stocks falling to 4.4 MMT from 6.2 MMT at the end of 2014/15. A Bloomberg survey estimated the EU all wheat crop at 147.7 MMT, from within a range of estimates of 146.2-149.5 MMT, down 6% on last year's record. The German crop is seen falling 7.2% to 25.8 MMT, although production in France will rise 2% to 39.8 MMT, the survey found. Production in Eastern European countries is generally forecast lower pretty much everywhere. Ukraine raised their forecast for 2014/15 grain exports by 1 MMT to a record 36.8 MMT, including 11.7 MMT of wheat. They said that early spring grains had been planted on more than 2 million ha, consisting mostly of barley (1.52 million ha). Russian early spring grains have been sown on 2.6 million ha, or 8.5% of the official Ministry forecast. IKAR estimated the Russian 2015 wheat crop at 54-59 MMT, and said that domestic prices for 12.5% milling wheat on an FOB basis had fallen $14/tonne in the past week as Russian growers bite the bullet and are forced into selling the old crop stocks that they hold to generate cash to fund spring plantings. For all the government assurances that cheap subsidised loans are available to Russian farmers to enable them to purchase their spring planting needs, the boots on the ground suggest that this is far from the case. Loans are very hard to get, and interest rates are sky high. Sellers are demanding cash on delivery for inputs such as seed and fertiliser. The Grains Industry Association of Western Australia says that wheat plantings in the country's top producing state may decline 2-3% this year. Barley production seen similar to previous seasons. May 15 CBOT Wheat closed at $5.00 3/4, up 2 cents; May 15 KCBT Wheat closed at $5.13 3/4, up 1 1/4 cents; May 15 MGEX Wheat closed at $5.45 1/4, up 6 1/4 cents.
