Soybean Demand Returning
Mar 03, 2011
Demand Could Return For US "Old-Crop" Soybeans
I continue to tell clients to to be careful buying into the thoughts of massive bean cancellations by China as we move ahead. Some wire services are talking about China canceling an extremely large amount of US beans and in turn going to South America. I wouldn't buy into that just yet. From what I am being told we have about 500,000 tons of beans currently loading in the Pacific Northwest heading out to China, and another 1,500,000 tons loading in the Gulf. That basically means half of the remaining beans that are scheduled to be sold to China are already being loaded. Considering that beans from the US are running about 30 days ahead of those form Brazil I highly doubt China is gearing up to cancel a massive amount anytime soon. If they continue to pencil as well as they have and China finds our quality to be better or need beans in a hurry, China may actually consider buying more "old crop" soy...Just a thought. Be careful jumping on the bandwagon thinking old crop beans are done.
South American Soybean Quality May Be Less Than Ideal
I continue to hear more moisture problems coming out of South America. Most of the locals are reporting abnormally heavy rainfall. They are not only experiencing delays in harvest, but are also experiencing some quality issues stemming from an extremely high moisture content (upwards to 30%). As you guys know harvesting beans with that much moisture can certainly create quality concerns and more expenses, hopefully prompting some interest back to the high quality US Bean crop. As long as the South American beans are left in fields filled with saturated soil there is a much greater likely hood of increased losses. As I reported last week producers are receiving less and less for their crop as elevators and end users continue to reduce the premiums being paid in order to justify the additional drying charges and poorer quality. You have to wonder at what point do the South American farmers tire of receiving this reduced rate. In addition, you have to wonder how the Chinese and European crushers will react to the poorer quality.
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