Soybeans — U.S. key export supplier
Nov 20, 2009 10:48 AM, By Ray Nabors, Heartland Ag Network
Weather problems are now thought to be factored into market prices. Grain supplies are adequate for short term demand. Export demand is driving the markets in feed and fiber. Ocean freight prices are increasing with oil prices making U. S. exports more expensive.
Soybeans
The United States will be the key supplier of soybean exports until the next South American harvest. Soybean prices find support from increased export demand. USDA export projections were increased 20 million bushels. Export inspections totaled 59.5 million bushels. China remains the largest buyer.
Palm oil supplies are tightening and that is soybean bullish. China has imported 41 million tons this crop year.
Corn quality problems are shifting demand to soy meal. Chickens on feed are still down 2 percent, but that is compared to 5 percent earlier in the year. Cattle on feed are up 5 percent four months in a row. That is fundamentally bullish for grain demand
Soybeans ending stock estimates were bearishly increased 95 percent at 270 million bushels. World ending stock estimates were increase 35 percent to 57.5 million tons. Yields are turning out slightly less than predicted. Export sales remain above average. Soybean crush was above expectations at 155 million bushels.
Corn
Quality problems are becoming a market factor for corn. The crop is only 54 percent harvested and most of that has high moisture. Diseases affecting feed use have been found in some corn. Test weights are lower than expected. Low quality corn is best suited for ethanol production.
Buyers are concentrating on soybeans and ignoring corn in the short term. Export inspections were disappointing at 22 million bushels. Total inspections for the year are 4.5 percent behind average. Export sales are lagging behind predictions.
Mexico bought 210,000 tons of U.S. corn last week. Farmer selling increases at $4. Wet infected corn is more difficult to place in storage. Chinese production is below average.
Wheat
Wheat prices continue to follow the relative dollar value as compared to other currencies. Lower dollars increase exports but higher dollars decrease demand. The market sentiment is that investor commodity buying is overdone. Wheat pricing is due for correction.
