Only hiccups for SA crop-weather
The old crop/new crop soybean spreading dominated Thursday’s trade action. The old crop beans were supported by continued rumors of China buying U.S. beans. The USDA confirmed the purchase of 130,000 tonnes to them Thursday. 55,000 tonnes were old crop while 75,000 were new crop. There continues to be talk that total purchase this week had were enough to fill 10 cargo ships. With China buyers being absent from the market last week due to their New Year’s break and the cancellation of 250,000 tonnes old crop beans, the trade does not have high hopes for a big weekly sales figure.
Shipping delays out of Brazil continue to garner headlines. Reports are that delays are now reaching the 50 day mark. Fifty-nine ships are waiting to load grain out of the Santos port today. Last year at this time they had only 29 ships waiting to be loaded. The line at the Paranagua port is even longer, 82 ships are waiting to be loaded. Last year the line had only 31 ships in it. These long waits are happening even before the glut of exports hit the port next month. With port workers expected to go on strike tomorrow and next Tuesday shipping delays are expected to get longer. These delays will open the door for the U.S. exporter to get some extra bushels sold. Meteorologist Drew Lerner of World Weather In. view the South American weather this way. “The bottom line for South America remains good for most of Brazil’s main crop areas during the coming week. Rain may fall a little too frequently in the far south raising the need for drier weather in early March. Center west and center south Brazil will experience a favorable mix of rain and sunshine for summer crop development, maturation, harvesting and new planting. Northeastern Brazil will continue in a net drying mode through the weekend. Southern Argentina still needs significant precipitation and may get some light amounts this coming weekend. Other areas in Argentina will see rain a little more often”. The annual outlook conference held by USDA, is being held today and Friday. In a speech today they estimated 77.5 million acres of beans would be planted this year. This is a slight increase from last year’s 77.2 million plantings. They projected bean production would rebound to 3.405 billion bushel this upcoming season with the bump up in production they projected the soybean average price for next year will be $10.50. They USDA will be releasing their full supply / demand tables tomorrow. We are still recommending producers to be out of old crop inventory (excluding gambling bushels) by the time South America’s harvest is in full swing (which is coming on fast). Major resistance on the March soybean chart is at the $15.00 psychological level. If the market tests this level, we would recommended producers sell more inventory that they don’t want to risk into the summer. We would recommend producers who want to maintain ownership of beans into the summer use options to mitigate risk…Jim McCormick