Soybean prices firm on exports, Brazil crop

by Ron Sterk
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KANSAS CITY — Continued strong export sales of U.S. soybeans and soybean meal, along with forecasts of lower soybean production in Brazil, have propelled nearby old crop soybean futures prices up about 4% since March 14, retracing much of the setback seen earlier in March related to concerns about cancellations by top importer China.

Tight domestic soybean stocks and strong domestic and export demand have been key factors fueling the rise in soybean and soybean meal futures prices. Also a factor has been several forecasts of lower 2013-14 soybean production in Brazil, including the latest from the U.S. attaché there that lowered the outlook to 88 million tonnes from 88.5 million tonnes previously. Some forecasts have trimmed expected production even more, with Brazil’s Conab last week estimating output at 85.4 million tonnes, down from 90 million tonnes forecast in February.

Nearby May soybean futures traded on the CME Group in Chicago traded as high as $14.52 a bu early March 20, up about 4% for the week.

Soybean export sales in the week ended March 13 reported by the U.S. Department of Agriculture on March 20 for this and the next marketing year totaled 639,700 tonnes, at the high end of trade expectations that ranged from 150,000 to 850,000 tonnes. The top buyer was Indonesia with 149,000 tonnes, indicating China’s buying has cooled for the current 2013-14 marketing year. China typically shifts to new crop South American supply in March, with the Brazil soybean harvest over 60% completed as of this week.

Trade sources indicated earlier this week that several cargoes of U.S. soybeans previously sold to China had been resold to U.S. soybean processors.

But China has been an active buyer for 2014-15, which begins Sept. 1, accounting for 243,000 tonnes, or 56%, of the 437,500 tonnes sold for next year in the week ended March 13, according to the U.S.D.A. Further, the U.S.D.A.’s 24-hour reporting service said March 20 that China also bought another 120,000 tonnes for delivery in 2014-15.

Soybean meal export sales in the week ended March 13 were even more impressive at 486,900 tonnes for both marketing years. The total was well above trade expectations that ranged from 40,000 to 350,000 tonnes.

The U.S.D.A. forecast U.S. soybean exports at a record high 1,530 million bus (41.64 million tonnes) in 2013-14, up 16% from the prior year. Export inspections for shipment (versus sales) of U.S. soybeans for the marketing year to date totaled 38.9 million tonnes as of March 13, up 22% from a year earlier, according to U.S.D.A. data.
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