- US soybean crush margins in Chicago have been in free fall since a peak was reached in late summer of 2014. Notice from the chart below that margins today are down to $.55/Bu but when higher cash prices are included, some US crush plants are operating at or slightly below breakeven. Normally, US crush plants close for maintenance as Midwest farmers seed their spring crops. As farmer sales dwindle, US crushers have to raise cash bids to maintain stocks. However, in the past few days, US crushers have started to ease their cash purchases as they see no reason to take a loss on processing. The US soybean processor has to be very careful not to overpay for cash beans when US meal demand is slowing, not least in part due to the avian flu outbreak.
- Today has seen the US$ Index fall (again) and quite sharply which has provided a bullish input into CBOT markets with corn, wheat and the soybean complex seeing some short covering. The US$ move is down to traders pushing back the date on which they expect that the Fed will raise rates, and this has moved from Jun or Sep to Dec at the earliest. US$ bulls have been unwinding longs, many of which have been in place as long as a year. Crude has been bolstered by the move with June ’15 WTI moving above $26/barrel.
- Stats Canada pegged March 31st wheat stocks at 16.74 million mt, canola (rapeseed) stocks at 7.04 million mt, and oat stocks at 1.59 million mt. The wheat stocks total was below trade expectations, while canola was slightly above. A year ago, Canada held 8.677 million mt of canola stocks. Canadian 2015 soybean stocks were 2,063 million mt vs. last year’s 1.419 million mt.
- Brussels updated crop S&D’s put 2015 soft wheat output at 141.6 million mt, which is a month on month increase of ½ million mt, but with 2015/16 end stocks at 15 million mt, a 1.2 million mt decrease month on month due to a 1.5 million mt increase in animal feed use. Corn output was reduced month on month by 1.7 million mt to 66.3 million mt with end stocks at 16.3 million mt, which is a 2.8 million mt month on month decrease. Perhaps the biggest surprise comes in the corn output figure, yield being the issue, with feed usage up by 1.5 million mt (having lowered it 3 million mt last month!). Given our understanding that the weather has been almost perfect (for yield) over the last month, and the EU’s MARS unit’s latest data showed a small increase in yields, it begs the question as to why the EU should spend their money on a “crop unit” and ignore their numbers! Our is clearly not to reason why! The main data is appended for your interest and late night reading pleasure – click on the link below to download as a PDF file.