Beans Rally on Brazil Crop Losses
Feb 18, 2014
Soybeans started the week in positive territory with March futures once again taking on the $13.50 mark after advancing 12 cents in overnight trade. Wheat and corn also advanced with more modest 2 cent gains.
For beans, Brazilian consultancy AgRural shaved 1.8 MMT off their estimate for Brazil's soybean crop on Monday, saying drought in much of the country in recent weeks had reduced yields. AgRural expects a crop of 87 MMT, down from 88.8 MMT in previous projections. The drought had not hurt top producing state Mato Grosso, however, where the harvest is now 37% complete, according to AgRural's weekly report. Recent rains may help mitigate losses though and could help boost yields of late-planted beans. Today, the National Oilseed Processors Association's will release their monthly report for January which is expected to show 162.4 MB crush, down 1.8% from December, a Reuters poll of nine analysts showed. NOPA reported that its members crushed 165.384 million bushels in December, the highest monthly figure in NOPA records dating back through 2002.
In corn, markets have found modest support of late from growing US exports and a tighter old-crop stocks situation. However, overnight Libya bought 30,000 MT of Ukraine corn for immediate spot shipment. Ukraine has ample corn supplies bought logistical problems have hampered their ability of late to move it to international markets. February exports are expected to be only 2.7 MMT for all grain, versus 4.7 MMT in December. If Ukraine begins to move more corn, this likely will hamper US exports in the latter half of the marketing year.
For wheat, front month March futures is trying to hold on to $6 at the close for the first time since early January. A strong Euro currency is helping keep European wheat less competitive in the world market. However, global supplies of wheat continue to be adequate. French winter wheat is 75% good to excellent, which is up from 66% this time last year.