Beans Struggle with SA Crop Looking Stron
Jan 26, 2014
Corn was under modest pressure overnight while the bean and wheat market posted slim gains in the night trade.
Beans continue to be conflicted between positive demand in the export market, and an outlook for record large South American supplies hitting the market in coming weeks. In Brazil, ships are beginning to lineup to move the record large crop. On Friday, there were already 39 ships waiting at the No. 2 grain exporting port Paranagua and 11 in the top exporting port of Santos. A Brazilian export firm expects exports there to reach 2.5 MMT in February as compared to only 959,000 MT in the same month last year. However, in the US demand has not really shown signs of faltering yet. Friday’s export sales showed an impressive week of 1.6 MMT for old and new-crop deliveries. Also, U.S. exporters shipped a record amount of soymeal last week as farmers in Argentina, the top exporter of the animal feed, hoarded soybeans amid a plunging peso. U.S. exporters loaded out 398,591 MT of soymeal, primarily to Asian destinations such as South Korea, Thailand and the Philippines. That was the biggest weekly shipment based on records dating back to 1990, according to U.S. Agriculture Department data released on Friday.
In corn, news continues to be limited to give the market something to be bullish about. However, Friday’s Cattle on Feed Report did show higher than expected cattle numbers. According to USDA Jan 1 inventory numbers were 95% of last year versus analyst expectations of 93.8% of last year going into the report. Corn basis levels saw modest support on Friday at export points as well as a few interior processors.
For wheat, weekly export sales announced on Friday were not much to give the market a boost. Weekly wheat exports for old crop were at 421,400 MT, and were within expectations. Brazil was a big buyer of HRW with 112,500 MT. Overnight, an outlook for more bitter cold weather in the US, continued to lend mild support as the potential for some winter kill was possible.