- CBOT grains (corn and wheat) are little changed despite nearby soybeans and soybean meal shedding 2.7% and 4% respectively as old crop vs. new crop spreads are unwound as the trade return from an extended holiday weekend. Rains in S America, particularly the needy Argentina, over the weekend have undoubtedly added to today’s weaker tone although Wednesday will doubtless see some recovery of losses based upon profit taking.
- There has been news, although unconfirmed, that up to three cargoes of US soybeans have been switched to Brazil for late February shipment.
- Official Chinese customs data has shown that corn imports in December reached 637,045 mt, a 19% decline from November’s level. The rejection of cargoes for GM contamination is blamed for the reduced volume. The December data brings total imports to 2.97 million mt, a 42% reduction from last year. DDG imports grew in December to 515,760 mt, which is a slight decrease on November’s 538,498 mt.
- Staying with Chinese news, they have announced an end to the government reserve purchase programme in 2014, farmers will receive subsidies rather than guaranteed minimum prices, which is the current position. The announcement, flagged a week or so ago, is perceived as predominantly bearish for prices as prices in China will now be able to reduce as world levels decline.
- In Brazil’s major soybean producing states, Mato Grosso and Parana the harvest is progressing; as of 16 January Mato Grosso was reported to have gathered 4% of the crop with yields described as “impressively high” at 3.1 – 3.3 mt/ha from early maturing varieties. It is too early to see the harvest impacting exports with only 25,000 mt reported to have been shipped. Port facilities in Paranagua are being made available for soybeans from 16 January with a temporary restriction on corn exports now in force thus freeing up capacity for soybeans. It is anticipated that Brazilian soybean export pace will reach 2 million mt in February, at least 4 million mt in March before jumping up to 7-8 million mt in April and May, which will help to alleviate the massive export demand being experienced this year.