Soy exports sizzling
11/18/14 — Grain prices rose to their highest levels in months last week as the surge started around October 1 continued into last week. However, the rumor of soymeal imports from Argentina quickly dropped soybeans like a George Forman hook! Prices sagged into Monday, when another weekly export shipments report showed a strong 115 mb of soybean exports in just one week. Four weeks of this strong of exports is the equivalent of our entire 450 mb carryout – a sign of just how strong the Chinese demand for U.S. soybeans has been.
Weekly export shipments of soybeans were outstanding Monday, November 17 at 115 mb, but corn (15 mb) and wheat (5 mb) were pathetic. It is interesting that we can sell 6x more soybeans than corn and wheat combined in one week – an astounding reminder that China loves buying beans, but the rest of the world is in no hurry to buy U.S. product.
Crop progress Monday, November 17 showed a slowing of harvest progress on all crops due to the recent snow and unseasonably cold weather across the entire US starting in early November. Now we show corn harvest in the US at 89%, 1% ahead of normal 88% but there remains crop to be harvested in areas that have snow that will slow down the final harvest. Soybean harvest is 94% complete, advancing 4% last week but now behind normal 96% harvested at this time. The snow once again is hindering the final harvest, and in some areas it is questionable that these soybeans will be harvested in northern areas where snow is deeper.
Cotton is 69% harvested, behind the normal 74% complete at this time with the cold weather slowing it down to only 7% completed last week. Sorghum is 83% harvested, advancing only 8% last week, with 87% normally harvested at this time. Sunflowers are 80% harvested, now 1% behind normal 81% harvested. Winter wheat is 95% planted, slightly behind the average 97% planted as we slowed to only 2% completed last week due to the inclement weather. Winter wheat is 87% emerged (vs. 84% normally), and is unchanged in crop ratings at 60% rated G/E. The snow cover may actually help winter wheat be insulated from the very cold weather we are experiencing across the U.S., so at least there is some benefit from the early arrival of winter.
Weather forecasts for the U.S. remain drier than normal for the central and western Corn Belt the next week, but there will be above normal precip for the eastern Corn Belt, the Delta, and the southeast. Temps remain below normal the coming week, continuing the well below normal temps we started in November. The 8-14 day forecast continues the cold weather, but moisture will become less prevalent as it is forecast to be mostly dry in the 8-14 day forecast.
SAM weather forecasts show blanketing rain across Brazil and Argentina over the next week, with seasonable temps as well that should be favorable for planting and germinating soybeans and corn. Planting progress is ‘catching up’ to normal now, with the 8-14 day forecast showing some areas will dry out enough to allow rapid planting progress.
Pro Ag recommended catch up sales of soybeans at $10.74 Jan futures on Wednesday, Nov. 12. We also recommended a storage hedge in corn at $4.05 July futures or better. With a 2 billion carryout in corn and 450 mb carryout in soybeans still projected, these prices levels are decent considering the level of carryout expected.
Pro Ag looks for grains to languish in the area of $9 to 10.50 the rest of the winter for soybeans, and $3.20-$4 for corn as well. The upside will remain limited due to the large stocks of corn and soybeans left as we complete harvest of what is a record large crop.