- Wow! Today has been a BIG day from a price movement perspective, we have seen CBOT Dec ’14 soybean meal trade close to a $32 range, first hitting fresh post harvest rally highs before turning lower and closing $10 off the lows. Funds have been hugely active, and there has been a suggestion that today may well produce a grains volume record.
- One positive, from a consumer perspective, aside from the lower close has been the strength of producer selling on the rally. Both US and S American farmers have been active sellers with strong cash movement, there has even been a suggestion that Argentine farmers have sold as much as half a million mt of old crop soybeans on the latest uptick in prices. The Nov ’14 soybean contract is scheduled to expire in a few days and there is expectation that deliveries will be made due to strong prices as well as the big crop.
- It is noteworthy that S American soybean meal cargoes are being booked into the southeast US, reportedly to a pig producer, the additional margin generated calculates to around $35/$40/mt as well as assuring supplies. Additional cargoes are being worked. Argentine crushers have, according to what we have picked up, secured sufficient soybeans to meet meal export demand through to year end, and it seems very likely that the US will be a destination.
- In an interesting “aside”, the Russian Agricultural Minister reported Russian winter acreage to be up 2 million ha at 16 million ha and also “guaranteed” the crop to be safe. He did stop just short of assuring us that the rouble wasn’t weak and that Russian troops are unaware of Ukraine’s existence! Sometimes stories are just made for repetition.
- Brazil’s Conab cited late rains, which are optimising output potential, as responsible for their latest update to soybean production. Their most recent 2014/15 crop estimate stands at 89.3-91.7 million mt, which is slightly narrower that last months 88.8-92.4 million mt figure. Conab’s figure, if realised, would still be a record despite being below the USDA’s latest 94 million mt figure.