Record Exports & Crush Continue, But Trade Eyes S. Am Crops
Market Analysis
A larger-than-expected rise in the USDA’s Brazilian monthly soybeans output adjustment of 4 mmt and expectations of a higher 2017 US soybeans plantings of 4 million acres or more have left the soybean market on the defensive much of this month. A rise in old-crop US soybean ending stocks also added to the pressure in this market when no change in stocks was expected.
This year's strong export sales and shipments pace continued in the winter quarter with 691 million bu. shipped. This pushed this year's first half foreign departures to 1.693 billion bu. which is 95 million bu. over two year's ago previous record. February's NOPA crush update from earlier this month was lower-than-expected at 142.8 million bu. vs the trade, but last month’s daily output was only 80,000 bu. per day less than January at 5.1 million bu. per day. Despite February’s 3 less days, last month’s crash will likely kept the US overall winter domestic processing at 493 million bu. and this year’s first half protein production from soybeans at a record 978 million. This year's total calculated 1st half demand for U.S. soybeans is 2.6 billion bu., 125 million larger than 2014/15’s previous record disappearance.
Despite this year's strong demand, this year’s record output has us projecting a 1.698 billion bu. March 1 stock level. This stock level is up from last year's 1.531 billion level and 2nd highest for March 1 since 2006/07 crop year. Last fall’s middle of the pack residual of 197 million bu. suggests this disappearance, which is a combination of supplies in transit for export and soybeans moving to seed firms for processing, could rise by an additional 19 million to 216 million. This stock report along with June’s quarterly supplies will help determine if the USDA will have to adjust last fall’s crop size to better reflect soybean ending stocks when exports and seed beans are totally accounted for in the US balance sheet.
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What’s Ahead This year’s soybean stocks will be observed to see if the USDA’s 2016/17 crop size is on target or if it might be changed depending upon the size of the residual vs. last fall’s 197 million bu. level. 2017’s planting intentions may be a bigger market mover that day if a higher than a 4 million acre jump in beans is reported. Use any 20-30 cents recovery to have old crop sales at 90% and new crop at 20-30% sold.
Disclaimer – The information contained in this report reflects the opinion of the author and should not be interpreted in any way to represent the thoughts of The PRICE Futures Group, any of ...
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