Soybean Comeback Continues
Feb 20, 2013
Soybean futures continued their climb back adding 12 cents overnight on top of the 45 cent gain from Tuesday. Corn and wheat however were fractionally lower.
Soybeans continued to get a boost from dry weather in Argentina along with continued demand strength. On Tuesday, China bought 120,000 MT of old crop soybeans and USDA’s weekly export inspections showed 40 MB for the week, up nearly 10 MB from last week and more than four times the level required to hit USDA’s annual forecast. In South America, shipping delays are said to be 30-40 days and Argentine farmers are said to be holding onto beans as a hedge against inflation and the rapidly devaluing peso. All this could keep the US bean market in play longer than the market has been factoring in.
For wheat, Winter Storm Q is hitting the central Plains today with snow accumulations expected of a foot or more in drought-stricken areas. Tuesday’s wheat export numbers came in at a better than expected rate of 30 MB for the week, up 10 MB from last week and above trade expectations of 15 to 20 MB. Export tenders are being floated by Egypt and Japan, with the US likely to win some of the business.
In corn, weekly exports totaled just 9.5 MB, down MB from last week and well below the more than 20 million needed to hit USDA targets. The USDA Outlook Forum on Thursday and Friday this week will provide non-survey based forecasts of new-crop plantings and ending stocks for 2013/14. Both are expected to be large.