- US crop conditions, which were reported last night, showed corn planting as expected at 95% complete, up from 91% week on week but below the five year average of 98%. Soybeans are now 71% complete, again as expected, up from 57% week on week and bellow the five year average of 84%. Spring wheat was reported to be 87% planted, behind the five year average of 96% but up from 80% week on week. Winter wheat condition is marginally changed week on week with the proportion rated as good/excellent now standing at 31% down from 32%, and the poor/very poor proportions now 42% compared with 43% last week.
- The price swings seen in the past two trading days have primarily mirrored the nervousness surrounding the final stage of spring plantings in the US. On Friday new-crop futures prices of corn and soybeans had still rallied on concern about additional planting delays from overly wet weather. However, much of these gains were given back on Monday when it turned out that weather conditions in the US soybean and corn belt were dryer over the weekend than had been thought. The weather outlook for this week is generally favourable, which should allow US farmers to focus on catching up with soybean plantings, now that corn sowing is largely complete.
- Without doubt, this year corn and soybeans are partly planted beyond the optimum time in the US, but the net effect on the crop sizes is uncertain. Some 1 to 3 million acres of corn acres are likely to be shifted to soybeans, somewhat mitigating the prospective recovery of US corn supplies in 2013/14. The soybean area will probably be larger than intended, but this may be partly offset by the detrimental effect of late plantings on yields. But first of all, the still significant planting delays in the key soybean producing states of Illinois and Iowa must be made up for.
- Funds have accumulated large long positions in soybeans on the CBOT, possibly exerting price pressure once the concern about inadequate planting conditions eases. The monthly USDA report to be released tomorrow is unlikely to include new indications on soybean crop prospects and should have only minor relevance for our markets. The necessary pronounced decline of export demand for US soybeans has occurred in recent weeks, probably requiring only minor revisions to the already extremely low US soybean carry-out projections for 2012/13.
- Farmers in Argentina are about to embark on a week long strike in protest over government policies. The timing is, at present, uncertain but the intention is that farmers will not sell their crops, meat or dairy products and will also blockade routes to export points in an effort to get their point across. Clearly, if this action goes ahead there will be disruption not only to exports but to domestic soybean crush ability, albeit of limited duration. Supplies of foodstuffs to the domestic market will be unaffected it was announced by the four largest farmer unions who appear to be coordinating the action.
- Oil World, has reported a weather dependent recovery in global oilseed production of 28 million mt in 2013/14. They commented upon the uncertainties associated with the anomalies which have been apparent in weather in recent years, also that such uncertainty could significantly affect output. In short, it appears that we are to continue to experience volatility at greater levels than may be considered “normal”.
- The report highlighted the global 2013/14 soybean crop at 284 million mt, an increase of 18.1 million mt on 2012/13 (6.8%). Global soybean end stocks were forecast to grow by 13.4 million mt to 74.6 million mt. The US output was put at 92 million mt, up from 82.05 million mt in 2012/13, Brazil’s 2013/14 figure was 84 million mt, up from 81.51 and Argentina’s output at 52.3 million mt is also an increase from 2012/13′s 48.5 million mt. Stock to usage ratios (t 31st August) were seen to improve in 2013/14 to 27.6%, an improvement over the last two seasons.
- S American soybean exports in May reached over 11 million mt, up just over 1.5 million mt than in May 2012. It is likely the figure would have been higher if late May weather had permitted vessel loadings. Brazil accounted for just short of 8 million mt of the total figure (a record) and brings their Jan/May soybean export total up to 19.6 million mt, 1.1 million mt more than last year.
- Tomorrow’s WASDE report will be released 17:00 UK time and we will update as soon as practical.