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Linn Soybeans: Decline in South American Yields Continues

Mike Christensen
By Mike Christensen April 20, 2012

Opening call, higher. South American bean yields continue to decline. Argentina’s Agriculture Ministry said on Thursday that Argentina is set to produce 42.9 mmt. of Soybeans. This is a cut from their previous estimate of mm mmt. The Buenos Aires Grain Exchange said that it will hold its soy output forecast unchanged for now but hinted they may make cuts ahead. Open Interest in Soybeans stands at 817, which is an all-time high. This coupled with huge long fund open interest has some nervous that despite the fundamental strength the Soy complex is vulnerable to a liquidation phase. Outside markets are supportive this morning. $USD is trading 34 lower, equities slightly higher, Crude oil is $1.75 higher.

Opening Call: Soybeans 6- 8 cents higher, Oil .30 to .40 higher, Meal 2.50 to 3.00 higher.


Top News

*** Chinese ag officials on Friday said the gov’t will sell 300,000 mt from Soybean stockpiles on Tuesday next week

*** Cash sources report 55,000 mt of feed Wheat was purchased Friday by Korea Feed Assoc, paying a reported $274.15/mt cif for the grain to arrive by September. Glencore was the reported seller.

*** Argentina’s gov’t expects the 2011/12 Corn harvest at 20.3 mln mt down 900,000 mt from their previous month’s report; the 2011/12 Soy harvest was also lowered in April to 42.9 mln mt that’s 1.1 mln mt below last month’s report

*** Buenos Aires Grain Exchange pegged Argentina Soy harvest at 37.2% complete, farmers have collected 16.16 mln mt so far. This week’s harvest estimate compares to last week’s 22.7% harvested and 9.85 mln mt collected

*** Buenos Aires Grain Exchange pegged Argentina Sunseed harvest at 100% complete, farmers have collected 3.599 mln mt so far. This week’s harvest estimate compares to last week’s 97.3% harvested and 3.47 mln mt collected.

*** This year’s Argentina sunseed harvest of 3.599 mln mt is almost 6% higher than last year’s 3.4 mln mt, average yield was 20.0 down slightly from last year’s 20.3, acc. to the Buenos Aires Grain Exchange

*** Intertek estimated Malaysian palm oil exports at 844,453 mt over the April 1-20 period down -5.6% from their estimate over the same 20 day period in March

*** SGS estimated April 1-20 palm oil exports from Malaysia at 839,829 mt a drop of -5.3% from their estimate in the March 1-20 period

*** Pending Tender: Vegoil traders report that 16,000 mt of Malaysian or Indonesia palm oil is being sought by India in an April 16th tender deadline. The oil is for prompt shipment from LH April to May 5th

*** Pending Tender: State run fishery in S Korea announced April 19-20 bid deadline in a tender where they’re seeking up to 60,000 mt of non-GMO soybeans for arrival late July to early Sept, acc. to traders

*** Pending Tender: India is seeking 12,000 mt of Malaysian or Indonesian palm olein in a tender to end on April 23rd and for shipment in May, this is in addition to the 16,000 mt tender announced yesterday and to end on April 16

*** Pending Tender: Traders say the grain agency in Iran issued a tender to buy up to 100,000 mt of Soymeal for shipment in the May-June period with the tender also expected to close early in the week of Apr 23

*** Pending Tender: April 23rd is bid deadline in 18,000 mt Indonesia/Malaysian origin palm oil tender floated by India’s MMTC. Shipment is expected before April 30 or May 7th

*** Pending Tender: April 24th is bid deadline in a 7,000 mt palm oil tender floated by India’s state trade company, origin should be Indonesian or Malaysian and shipment is expected between Arpil 25 to May 10th

*** Pending Tender: Traders in the cash market also say a tender scheduled for an April 26th is seeking 12,000 mt of US soybean and was floated by Taiwan Sugar Corp for June/July shipment

*** April 26th is tender deadline for 3,000 to 6,000 mt of Malaysian or Indonesian crude palm oil sought by India’s PEC state trading firm, delivery is expected in the May 1-10 period

*** Pending Tender: Cash sources say feed millers in Thailand are seeking between 150,000 and 170,000 mt of soymeal for shipment in the final quarter of 2012

*** Dalian Jan Soybean futures were unchanged on Friday ending the session at 4,636 yuan/mt

*** Dalian. Sept. Soymeal futures were up + 11 @ 3,359 yuan/mt

*** Liffe May Rapeseed futures were down – 1.50 @ 501.25 euros/mt.

*** In Malaysia Jul. Palm Oil futures were up + 23 @ 3,500 ringgit/mt. range on the day was 3,509 to 3,444.

*** CBOT Soybean Volume & Open Interest for April 19th 2012 was 234,258; Open Interest increased +6,296 to 817,866.

*** CBOT Soybean Oil Volume & Open Interest for April 19th 2012 was 116,463; Open Interest increased +4,594 to 392,351.

*** CBOT Soybean Meal Volume & Open Interest for April 19th 2012 was 99,885; Open Interest increased +4,668 to 269,863.

*** Outside markets. Crude Oil up 97c @ $103.69; Gold up +$5.20 @ $1646.60 ; Silver off +8c @ $31.86 ; US $ index off -32 pts @ 79.40

Cash Markets

Bean Barge Corn Barge SRW Barge HRW Track Ill Riv Frt Apr +61/66 K +63/65 K +62/66 K +105/115 K 325 May +65/67 K +61/63 K +60/66 K +105/115 K 330 June +68/70 N +65/70 N +52/59N +95/100 N 340 Oct +75/78 X +59/62 Z 590

Truck Beans Corn Wheat Meal Hi-pro Oil Chicago +0 K +21 K +0 K
Toledo -15 K +12 K +8 K
Dec ILL +10 K +35 N -11 N -150 K

Mike Christensen
By Mike Christensen April 20, 2012