US New Crop Soybean Price Ratio Vs Corn Near Historic High
11/04/16 -- Soycomplex: Beans closed firmer across the board heading into tomorrow's April WASDE report from the USDA. Funds were seen as featured buyers today and appear to be comfortable ahead of tomorrow. The average trade guess for 2015/16 US ending stocks is 454 million bushels tomorrow, with world ending stocks expected at 78.96 MMT. Argentine and Brazilian output are seen at 59.0 MMT and 100.20 MMT respectively. Weekly export inspections today were 386,768 MMT, taking the season to date total to 42 MMT, down 7.3% on last year. That's enough to hit the USDA target for the season. The current US Soybean:Corn price ratio is lining up at 2.55:1 on new crop, which is historically high. The top of the market in that was 2.58:1 set in the summer of 2014. May 16 Soybeans settled at $9.28 1/4, up 11 1/2 cents; Jul 16 Soybeans settled at $9.36 3/4, up 11 3/4 cents; May 16 Soybean Meal settled at $280.10, up $6.40; May 16 Soybean Oil settled at 33.90, down 4 points.
Corn: The market closed lower. Weekly export inspections of 1.122 MMT were in line with expectations. YTD inspections are now 20.772 MMT as of last Thursday which is 14% down on a year ago. The USDA expects full season corn exports from the US to be down 10.2% in 20154/16. In tomorrow's USDA report the trade sees US ending stocks of 1,845 million bushels, with world stocks at 207.35 MMT. Plant beans instead of corn is what the current new crop price ratio is telling the market. The USDA FAS in Brazil said that the country might produce a record 86 MMT of corn in 2016/17 (the harvest after the current one). The cash-strapped Brazilian government is considering introducing export duties on corn and beans of 2.8% to increase budget revenues, according to some media reports. Ukraine seaports were said to have shipped out 386,300 MT of corn last week. May 16 Corn settled at $3.56 3/4, down 5 1/2 cents; Jul 16 Corn settled at $3.59 3/4, down 5 1/4 cents.
Wheat: The wheat market finished with double digit losses across the three exchanges. Weekly export inspections of 339,226 MT were a bit better than last week, but 28% smaller than the same week a year ago. YTD inspections are 17.155 MMT, still 12.6% smaller than the same period in 2014/15. The USDA expects these to only be 5.5% lower in a season with 4 weeks left to run. Various reports suggest that Brazil will produce a larger and better quality wheat crop than last year if the weather co-operates. The USDA's FAS have plantings at 2.2 million ha, and yields up 7%, for a crop of 6.0 MMT. The USDA has got a nice little boost in wheat exports by demand from Brazil in the past few year. Argentina would usually be the main beneficiary of ant Brazilian demand due to being a fellow member of the Mercosur trade bloc, although they have had volume and quality issues of their own in the last few years they should be OK for 2015/16. Thailand were said to have bought 100,000 MT of US milling wheat. Egypt are back in the market tomorrow. Jul 16 CBOT Wheat settled at $4.54 1/4, down 12 1/2 cents; Jul 16 KCBT Wheat settled at $4.54 1/4, down 16 1/2 cents; Jul 16 MGEX Wheat settled at $5.18, down 11 1/2 cents.
