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Soybeans: record South American crop


Bearish news: South American soybean production is predicted to hit a new record of 126.4 million tons. Argentina exports more soybeans than any other nation except the United States. Production there is anticipated to increase 66 percent to 53 million tons.

U.S. ending stocks are anticipated to reach a record 330 million bushels. Soybean exports the lowest in eight months below 204,000 tons. Planting intentions for the United States are near 77 million acres.

Palm oil production is anticipated to increase as yields increase and more acres are planted. Indonesia is increasing production 2.5 million tons expecting a crop of 23 million tons. Total palm oil production could reach more than 48 million tons an increase of 7 percent.

Bullish news: Argentina has flooding on some soybean fields and rain in the forecast. Soy-oil fundamentals will improve as Argentina has the largest export supply. Despite the South American crop, demand is projected to result in a deficit of one million tons of soy-oil this year. India will increase palm oil imports. Chinese imports will increase palm oil imports 7 percent, Europe 6 percent. Vegetable oil use is expected to increase worldwide by more than 7 percent.

Soybean importing countries have increased demand of 37 percent this year. U.S. exports are expected to reach 9 million tons. Export inspections of 35 million bushels are strong. Total export inspections are 10 percent above average.


Bearish news: As the dollar gains value exports are negatively affected, especially corn and grains. Feed use is at the lowest level in two decades. The United States cattle herd is at the lowest level in 5l years. Hog herds are also significantly smaller, but hogs can recover faster than cattle.

USDA is predicting a larger corn crop, over 13 billion bushels, from 89 million acres. Major importing nations, Japan and Korea are buying Argentinean corn. South Africa is expected to produce a record corn crop of 12 million tons up 800,000 tons.

Bullish news: Expect beef prices to rise as the economy recovers. There will be too few cattle to meet demand next year. U. S. ethanol production is expected to reach nearly a billion gallons next year. Ethanol use will take 4.5 billion bushels of corn.

Some of Argentina’s corn crop has flooded. Harvest will not begin there until March. It is anticipated that Argentine corn will have wet weather damage similar to corn in the United States last season.

The National Weather Service is predicting a wet spring in the Corn Belt. Last week’s corn exports of 974,000 were 31 percent above the previous week. Exports were above market expectations.


Bearish news: World wheat trading is expected to drop 15 percent as more countries produce more domestic wheat supplies. U.S. wheat exports are down 27 percent this year. Egypt is buying less expensive Russian and French wheat. Stronger dollars increase the price of U.S. wheat. Increased dollar values are bearish for wheat exports.

Bullish news: Acres planted to wheat this spring in the United States are estimated to be 37 million. That is the smallest wheat acreage since 1913.


Bearish news: USDA predicts world rice ending stocks will increase 2 million tons. Medium grain rice supply in the United States is anticipated to increase 2 million hundredweight. Rice acres and production are expected to increase in the United States. Increased dollar values are rich market bearish.

Vietnam is selling rice below world market prices to make quick cash sales. Thailand is selling rice out of stored intervention stocks at world market prices that are below our domestic prices.

Bullish news: Long grain rice supply in the United States is expected to drop 3 million hundredweight. Rice exports of 89,000 tons were expected but shipments of 149,000 tons were bullish.


Bullish news: Cotton ending stocks could go down to 3.3 million bales. That will be the smallest supply in six years. Production of 12 million bales is the lowest in 19 years. Fear of inflation and fundamentally increased demand with tight supply has stimulated trader buying.

Exports of 373,000 bales were good considering the Chinese New Year holiday. Deliveries rose above 517,000 bales last week. World production will lag behind world use by 5 million bales.

Bearish news: Production is expected to reach over 12 million bales. Cotton will cover an additional million acres this season. Unemployment remains high limiting demand for cotton products worldwide. Debt problems in Europe will limit buying of cotton products.


TAGS: Soybean
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