Soybean exports beat expectations
Nov 24, 2009 9:45 AM, By Ray Nabors, Heartland Ag Network
Soybean markets are technically overbought. Soybean prices are expected to gain on corn. If that trend goes into planting season, corn acres will drop.
Soybean demand is 24 percent ahead of USDA predictions so far this season. Weekly soybean export sales exceed market expectations by nearly 35 percent at 1.349 million tons last week.
Palm oil prices rose 2 percent last week.
Argentina’s soybeans are 44 percent planted, but weather has been unfavorable for crop development. Planting in parts of Brazil has been delayed by rain.
Soybean markets are technically overbought. Soybean prices are expected to gain on corn. If that trend goes into planting season, corn acres will drop. Traders are buying soy oil and meal as feed demand increases.
Corn
Delayed harvest and quality problems associated with wet grain and diseases are bullish for corn. Corn harvest continued at a normal pace last week. With 90 percent of soybeans harvested, farmers paid more attention to corn.
Farmer selling of corn increased. Wet grain is difficult to store without quality losses. Farmer selling will limit upside price potential. Markets expect most of this crop to be sold.
Exports are slow, but Mexico increased exports substantially after drought conditions reduced corn production there. Chinese feed demand is increasing as their hog herds and chickens increase. This is bullish for corn and soybeans.
Corn export sales last week were below market anticipations at 353,000 tons. Total seasonal sales are 7 percent behind the USDA forecast.
Traders are speculating the EPA may increase ethanol fuel blend standards. Any increase in ethanol use will significantly affect corn prices.
Wheat
United States export demand for wheat has dropped. Buyers are concentrating on lower-priced wheat from Asia and Europe. Another factor is the increase in ocean freight prices.
Weekly export sales met low expectations at 362,400 tons. Wheat sales are 8 percent below predictions this season.
Increased feed use will support wheat prices by taking more corn supplies out of circulation. Lower dollar values are making U.S. wheat more competitive on the world market. Higher ocean freight will continue to limit exports if oil prices continue higher. Asian and European wheat have the market for now. Trading volume declined during Thanksgiving week.
