Market News

Forecast for South American rainfall pressures soybeans

Soybeans were lower on profit taking and speculative selling. Also, the dollar was mostly higher and crude oil was sharply lower with U.S. demand at a 15-year low. Past that – weekly export numbers were good but as of Friday afternoon, there was more rain in the weekend forecasts for Argentina and southern Brazil. Soybean meal and oil were lower on spillover from beans and the possibility of at least some rebound in South America’s crop. The International Grains Council sees the global 2011/12 crop at 256.4 million tons, .8% less than the last guess and 4% below the 2010/11 record. Argentina is expected to be around 51 million tons and Brazil is pegged at 71.8 million tons. Informa Economics latest 2012 U.S. planted area estimate is 74.568 million acres, down slightly from the December projection; 2011 U.S. acreage totaled 75 million acres.

Corn was mixed with March, May, and July up on commercial demand and deferreds lower on profit taking. Corn was also watching South American weather but it’s probably too late for at least some of their crop. Weekly export sales were good but shipments remain slower than expected. Ethanol was mixed, near unchanged. Informa Economics projects 2012 U.S. planted area at 94.748 million acres, up more than 350,000 from their December guess and well above the 2011 total of 91.9 million acres.

The wheat complex was mixed. Chicago and Kansas City were up on short covering while Minneapolis was weak on profit taking. Wheat’s fundamentals have turned a little less bearish, but are still an overall negative. In any event, there was no fresh supportive news with export sales inside estimates and another slow week for shipments. European wheat was slightly firm but essentially unchanged. Informa Economics sees U.S. winter wheat acreage at 41.947 million acres, with spring wheat at 13.493 million, and durum at 2.465 million acres. South Korea bought 225,000 tons of optional origin feed wheat. Private buyers from the United Arab Emirates picked up 25,000 tons of optional origin hard wheat and 40,000 tons of soft wheat from Kazakhstan.