Brazil Increases Grain Output
Jan 09, 2013
Grain futures were mixed overnight as traders await key economic data for further price direction. Corn and beans were off 1 to 2 cents, while wheat managed a small gain of one cent.
Estimates from Conab, the Brazilian crop bureau, put the soybean crop at 82.7 MMT vs 82.6 MMT from their forecast in December, while they pegged corn at 72.2 MMT vs 71.9 MMT last month. Both estimates are higher than what USDA had projected in their latest December report. On the demand front, concerns continue to grow that China may substantially slow their soybean purchases. Some analysts look for China to scale back soybean purchases in January and February by more than a third after buying unusually high amounts at the end of 2012, as a drop in poultry consumption may limit protein needs.
However, in the wheat market, China has been noted to be a buyer of late, acquiring several cargoes of high-protein wheat from the U.S. and Canada. Chinese wheat business could increase as their domestic supplies stay tight until May, when the new harvest hits the market.
In corn, tight stocks combined with sluggish demand have kept prices fairly range bound over recent sessions. Over the last several days, key South Korea grain buyers have been acquiring corn but most of the business has thought to be garnered by South America. A Reuters survey of analysts shows most expect the December 1 quarterly corn stocks to be around 8.28 billion bushels. But in recent years USDA has been showing higher stocks on December than what analysts’ have guessed.