Brazil Soy Crop Seen Bigger than USDA
Jan 29, 2014
Grains were lower overnight in relatively quiet trade. Corn and beans were down a penny, while wheat gave up 2 cents in the night trade.
In beans, a USDA attaché has raised its estimate of Brazil’s soybean crop to 89.5 MMT, above USDA’s official forecast of 89 MMT. The attaché also raised its forecast of Brazil soy exports to a record 46 MMT topping USDA’s official figure of 44 MMT. However, "uncertainty persists in transportation logistics and global market prices," it said. "Transportation and logistical improvements from 2013 to 2014 are marginal and hence these improvements are expected to proffer only marginal relief," the report said. A drier trend in parts of the country's crop belt in recent weeks has had little negative impact, the attaché said. "Parts of Brazil have experienced irregular rains in late December and early January. The mild disruption in precipitation does not appear to have had any significant impact on production," the report said.
In wheat, the US got a small chunk of the Egypt wheat deal announced on Tuesday. Egypt’s GASC bought 240,000 MT of wheat with most of it going to Russia, but the US getting a 60,000 MT deal for SRW wheat. France was shut out of the deal after the GASC lowered its moisture content requirement on the wheat to 13%, which could hamper any future deals for France. In the US cold temps continue which has been giving some mild support to the wheat market due to some chances of winterkill.
For corn, political unrest and icy cold weather is hampering the Ukrainian corn market. Ukrainian exporters are finding it difficult to get supplies as farmers there face logistical problems from ice and cold weather. Adding to the problem is the resignation on Tuesday of Ukraine’s Prime Minster and the ongoing political unrest. Currency values there are at a 4-year low against the dollar and farmers are holding grains back as a hedge against the risk. Slowing exports out of Ukraine should help the US cause in moving corn. In the US, basis levels found some support on Tuesday at key river terminals as Gulf basis levels inched higher.