Soy prices down, roads open as truckers strike wanes in Brazil

Truckers in Brazil were blocking only a few roads Tuesday afternoon as the ongoing truckers strike waned, but soybean futures were down, according to reports.
Truck drivers are now focusing their attention on Brasilia, and a key highway in the largest soybean state, Mato Grosso, had opened after two weeks of protests. There were only seven protests remaining that affected federal highways, down from 18 on Monday and more than 100 a week ago.
Truckers opened the BR-163 highway in Mato Grosso for the first time since February 17, as they focused on talks in the nation’s capital.
"It's a truce due to the meeting this Tuesday in Brasilia," said Mato Grosso trucker Junior Boscoli. 
More than 500 trucks have arrived at Paranagua, Brazil’s second-largest soy exporting port, guaranteeing exports at least through Thursday. May soybean future prices were down 0.76 percent. The strike also has cost the country’s pork and poultry industries US$241 million, according to ABPA.
Reports said 70 percent of operations at the Rio Grande port were affected by the strike. A spokesman said the port will finish an analysis of grain stocks by Thursday, but that it is not at risk of running out before then.

Demand for US soybean meal in animal feed grows

U.S. animal agriculture's consumption of U.S. soybean meal increased by 1 million tons, or the meal from 42 million bushels of soybeans, in the 2011-2012 marketing year, according to a soy-checkoff-funded report. This is good news for soybean farmers since domestic animal agriculture uses about 97 percent of the U.S. soybean meal consumed in the U.S.
According to the study, Animal Agriculture Economic Analysis: 2002-2012, U.S. poultry, livestock and fish farmers used more than 30 million tons of soybean meal in the time period measured, or the meal from more than 1.26 billion bushels of U.S. soybeans. Broilers and swine continue to be by far the two biggest soybean-meal consumers. The meal consumption per species breaks down as follows:

• Broiler chickens: the meal from about 476 million bushels of U.S. soybeans 
• Hogs: the meal from about 410 million bushels 
• Laying hens: the meal from 84 million bushels 
• Turkeys: the meal from more than 75 million bushels 
• Other: the meal from about 217 million bushels 

Lower soybean prices will test China’s appetite

Already known as the world's largest buyer of U.S. soybeans, China's true appetite for soybeans is likely to be tested as soybean production is anticipated to increase worldwide in 2014 and 2015. Chip Flory, editor of Pro Farmer, offered insights into soybean production and use on October 15 during the Grain & Meat Outlook Webinar, hosted by WATTAgNet and Farm Journal.
The webinar is the third in a series and was sponsored by Nutriad. An archived version of the Grain & Meat Outlook Webinar can be found online.
Flory's projections for soybean production for the 2013-14 marketing year called for U.S. soybean production to be at 77 million acres, a slight decrease from the 2012-13 season where 77.2 million acres were planted. However, with projected yields increasing by a bushel per acre in 2013-14, that difference is offset. Likewise, production in Brazil and Argentina is also projected higher, with Brazilian soybean production jumping from 82 million metric tons to 88 million metric tons, and Argentinian soybean production leaping from 49.5 million metric tons to 55 million metric tons.
U.S. soybean production is expected to see a significant increase for the 2014-15 marketing year, with 81.2 million acres planted and yields projected higher at 44 bushels per acre.
If those projections are realized, prices will continue to substantially drop. The average price per bushel for the 2012-13 year was $14.40 per acre, but estimated at $12.75 per acre for the 2013-14 year. Further price decline is anticipated for 2014-15, as Flory estimates the soybean price to be around $9 per acre.
"That's going to be awfully tempting to China to really get aggressive with their bean buying under a pricing scenario like that," said Flory. "With a good 2014 bean crop, China's appetite for soybeans will be tested."
Tom Elam, president of FarmEcon LLC, also participated in the webinar.

US corn, soy prices following expected post-drought patterns

U.S. corn and soybean prices have generally followed the expected pattern experienced in other "short crop" years, with prices peaking near harvest and returning to pre-drought levels later in the marketing year, according to University of Illinois agricultural economist Darrel Good.
“For old-crop corn prices, July 2013 futures peaked at $8.24 on August 10, 2012, nearly $3.00 above the June 2012 low,” said Good. “That contract is currently trading near $6.50, well below the peak, but still above the pre-drought level. Due to an inverted price structure, spot-cash prices have been above July futures in much of the Corn Belt since January 2013, and that strong basis continues.
“Prices remain generally high as it is not yet clear that the small crop of 2012 has been sufficiently rationed,” he said. “Exports remain weak, but ethanol production is rebounding from the low levels in the first half of the marketing year. Uncertainty still surrounds the magnitude of feed and residual use of corn."
For new-crop corn, prices have completed the transition back to pre-drought levels, according to Good. December 2013 futures peaked at $6.64 on September 10, 2012, about $1.50 above the June 2012 low. That contract is currently trading just over $5.15, about $0.05 above the summer 2012 low. Soybean prices have behaved similarly to corn prices but are still well above pre-drought levels. July 2013 futures peaked at $16.05 on Sept. 14, 2012, about $3.85 above the June 2012 low. That contract is currently trading near $14.60, still in the upper half of the trading range of the past year.
Due to the ongoing futures price inversion, spot-cash prices in the Corn Belt have been above July futures all year, with basis levels strengthening in recent weeks. Old-crop prices are being supported by prospects of a minimum level of year-ending stocks and the need for consumption to remain under the pace of a year ago.
For new-crop soybeans, prices are closer to a complete transition back to pre-drought levels, said Good. November 2013 futures peaked at $14.10 on September 14, 2012, $2.70 above the June 2012 low. That contract is currently trading near $12.25, $0.85 above the low of a year ago and $1.85 below the peak.

US corn, soy planting estimates up

U.S. corn and soybean planting estimates are up from previous forecasts, according to an Allendale Inc. survey, and wheat plantings will increase for the third consecutive year.
The corn forecast is now at 96.956 million acres, down from 2012’s 97.155 million acres and above the 96.5 million that the U.S. Department of Agriculture forecast on February 22. Soybean plantings will rise to 78.324 million acres from 77.198 million in 2012, according to Allendale’s survey. The USDA February estimate said that 77.5 million acres would be sown in 2013.
The combined area planted with all wheat varieties is expected to rise to 56.261 million acres from 55.736 million in 2012. In February, the USDA said farmers would sow 56 million acres.

US corn, soybean prices may drop in 2013

U.S. corn and soybean prices may drop significantly in 2013 due to normalizing weather conditions, according to U.S. Department of Agriculture Chief Economist Joe Glauber, who spoke at the annual Agricultural Outlook Conference in Arlington, Va., the week of February 18.
According to Glauber, corn prices in 2013 will average $4.80 per bushel, down 33 percent, and soybean prices will fall to $10.50 per bushel, down 27 percent. “There’s no reason to believe that we won’t be looking at normal yields this year” because of recent improvements in dry conditions in the eastern corn belt, said Glauber. Lower prices won’t necessary benefit meat and poultry producers, however, until later in the year.
Planted acreage is expected to remain roughly the same, around 230 million acres. Corn acreage will drop 0.7 percent, while soybean and wheat plantings will increase slightly. Overall, the USDA is forecasting corn production to increase 35 percent to 14.5 billion bushels from the 2012 drought year, while soybean production will rise by 13 percent to 3.4 billion bushels.

Soybean prices skyrocket on dry Argentina weather

Soybean prices rose sharply after Argentina didn't get rains that had been forecast over the weekend, according to reports.
March soybeans rose 45.75 cents to $14.7025 per bushel as markets reopened after the U.S. Presidents Day holiday on February 18. The gain of 3.2 percent was the biggest in more than a month. Soybeans are rebounding after slumping since the beginning of February on forecasts for a strong harvest in South America. The crop there is nearing harvest.
The prices are expected to continue their upward movement, as early calls for commodities on February 20 are showing soybeans 17 to 19 cents higher.
In other feed grains trading, wheat and corn both fell on forecasts that winter storms would bring snow to the Plains region, giving soil there needed moisture and improving the outlook for this year's feed crops.

Brazil 2012–2013 soy crop revised up from previous record

Brazil's soy crop for the 2012–2013 season has been revised up, to 79.08 million metric tons, from an already record estimate of 78.1 million metric tons, according to analysts Celeres.
Data is showing the planted area growing beyond previous estimates, they said, to 27.44 million hectares, up 1 percent from September numbers and up 9 percent from the 2011–2012 season. The top soybean-producing state of Mato Grosso will account for most of the new soy area, adding 11 percent to its soy area forecast at 7.78 million hectares. All of the main producing states — Parana, Rio Grande do Sul, Goias, Mato Grosso do Sul — and even lesser producer states, such as Minas Gerais and Bahia, will sow additional fields with soy this season, according to Celeres.
Farmers have sold 46 percent of the new soy crop currently being planted, up from 26 percent of the previous year's crop sold in 2011. The old soy crop of 66.3 million metric tons that ended harvest in May is 98 percent sold, up from 91 percent at this time in 2011, said Celeres.

World Bank: Global corn, soybean prices at all-time highs

Corn and soybean prices are at all-time highs globally, according to a recent World Bank report, causing global food prices to increase by 10 percent and creating severe budget challenges in the Middle East and Africa.
The World Bank said the ongoing drought and dry summers in the U.S., Russia and India are the major cause, resulting in $300-per-metric-ton corn — twice the price of 2010. Soybeans have doubled to more than $600 per metric ton in five years. The World Bank's report is similar to that of the United Nations’ Food and Agriculture Organization, which said in August that rising grain, corn and sugar prices drove up its food price index by 6 percent. 

US soy prices up on increased export demand

U.S. soybean prices have rebounded, increasing 10 cents to $13.55 per bushel on March 21 on increased demand from China coupled with worries that U.S. farmers might not plant enough to meet global needs, according to reports.
China may import 25 percent more soybeans in the first half of 2012 than in the first six months of 2010, said an official think tank. "In a normal year, South American beans would outprice U.S. beans during this time frame by $30 a [metric ton], but those types of discounts are not here," said Roy Huckabay with the Linn Group. "U.S. beans are really rather competitive."
A strike by truckers in Argentina has added to worries about the availability of South American soy supplies. "I think the Argentine truck strike is getting some publicity," said Mike Zuzolo with Global Commodity Analytics. "If the South American supplies are not available for increased purchases by China, that suggests you want to keep some premium for beans."

Distillers' grains substituting for more corn, soybeans in feed

On average, between crop years 2006/2007 and 2010/2011, 1 metric ton of distillers' grains (DDGS) produced for animal feed by U.S. ethanol plants substituted for about 1.22 metric tons of corn and soybean meal combined, according to a report by the U.S. Department of Agriculture.
These findings may result in a net increase in DDGS in animal feed, as over time the amount in beef cattle feed declines but the share in dairy cattle, swine and poultry feed increases, according to the report. "As the market share for beef cattle declined, market shares for dairy cattle, swine and poultry increased," said the report. "Beef cattle’s DDGS substitution rate for corn is higher than any other type of livestock/poultry but is the lowest for soybean meal. Changes in aggregate substitution rates are expected to slow as annual market shares by type of livestock/poultry stabilize."
Corn and soybean meal quantities fed in the U.S. have moderated or declined in recent years, due partly to the substitution of DDGS or other ethanol coproducts (corn gluten feed or corn gluten meal) for corn and/or soybean meal. As of the 2010/2011 crop year, DDGS replaced soybean meal as the number two feedstuff fed, and is second only to corn, according to the USDA.
While ethanol expansion raised the demand for corn, DDGS from the dry-mill production process partially offsets the impact on the feed market. Consequently, the net effect in the domestic feed market of a bushel of corn being used for ethanol production is less than a bushel. For example, the amount of feed (corn and soybean meal) replaced by the DDGS represents about 38% (weight basis) of the corn used in the associated ethanol production process for a given crop year.
According to the USDA, future industry surveys could provide additional information on DDGS substitution for corn and soybean meal, including information on the market share of DDGS consumed by type of livestock/poultry and the substitution rates of DDGS for corn and soybean meal by type of livestock/poultry.

India soybean-meal exports to climb 25%

India soybean-meal exports are expected to rise 25% in 2012 after above-normal monsoon rainfall helped increase the crop, according to reports.
Production in 2011-2012 may exceed 11 million tons on the 10.32 million hectares (25.5 million acres) of soybeans planted, according to the country's farm ministry. The numbers may lead to export shipments totaling 5 million metric tons in the year beginning Nov. 1, up from the current year's estimated 4 million metric tons. Strong demand in Japan and Europe are expected to help with the gains in India exports.

US corn harvest may reach 13.759 billion bushels

Analytics firm Informa Economics predicts U.S. farmers will harvest 13.759 billion bushels of corn and 3.203 billion bushels of soybean crop in 2011, according to reports.
Informa estimates corn yields at 162.5 bushels per acre, based on harvested acreage of 84.7 million acres. The firm's 2011 harvested corn area predictions are 200,000 acres short of June estimates from the U.S. Department of Agriculture.
Estimates for soybean yields are 43.1 bushels per acre, based on harvested acreage of 74.3 million acres. Estimates for U.S. wheat harvests in 2011 are 2.095 billion bushels from 47.2 million acres, a wheat yield Informa projects to be 44.4 bushels per acre.

China increasing soybean imports due to record pig production

China may boost international soybean purchases 33% to 66.9 million metric tons by 2014, a 16.6 million-ton increase.

China may boost international soybean purchases 33% to 66.9 million metric tons by 2014, a 16.6 million-ton increase, due to doubled meat consumption — particularly pork — established over the last two decades.
Almost half the world’s pig meat comes from China, which has 689 million pigs and will be responsible for all of 2011's increase in global supply, according to the U.S. Department of Agriculture. “U.S. farm trade with China may double in the next five years,” said Michael Swanson, the senior agricultural economist in Minneapolis for Wells Fargo & Co. A significant part of this trade will include soybeans.
China is expected to import 57 million metric tons of soybeans in the 12 months to October 2011, more than twice the amount five years ago and 60% of the global total, according to the USDA. As domestic agricultural output failed to keep pace with demand in 2010, China’s imports jumped 34% to $17.52 billion. Pork accounts for about 75% of Chinese meat demand. 

US Corn, soybean forecast for 2011

Current consumption of US corn and soybeans is a great deal higher than industry analysts expected, according to Tim Brusnahan, vice president of Brock and Associates, speaking at the recent WATT Online Animal Forum: Feeding the Globe. The production of ethanol, together with several other factors, appears to be at the heart of current fluctuations in the feed ingredients market and as a result, in the livestock markets as well.
Planting intentions for 2011
Referencing the recently released USDA report on 2011 planting intentions, Brusnahan noted that of the eight major crops there was an overall increase of 8.6 million acres planted versus last year. Corn plantings came in at 92.2 million acres versus a pre-trade estimate of 91.8 million acres. On the soybean side, acreage expected came in slightly less than the pre-trade market had planned on, and wheat as a whole came in slightly higher, with the exception of durum wheat which came in slightly lower.
USDA grain stocks report
The recent USDA grain stocks report was also cause for a good deal of concern in the industry. As of March 1 the amount of corn remaining in the US from last year’s harvest is 6.52 billion bushels. This is 1.2 billion bushels behind last year and below pre-trade estimates of 6.69 billion bushels. In addition, soybeans are at 1.248 billion bushels, which is 22 million bushels less than last year and below pre-trade estimates of 1.3 billion bushels. Consumption of corn was at an all-time high this past quarter and soybean consumption was near an all-time high.
Corn futures prices are currently around $7.00 in the nearby contract, which is representative of the 2010 crop year. This is far above the $5.50 to $6.00 level which is a more typical value for the stock. As a result, based on the current market conditions, Brusnahan’s firm is predicting that crop prices for corn will continue to be volatile for another year and a half.
Corn usage
Brusnahan noted that the current stock to usage ratio for corn is at five percent as a result of ethanol production and feed consumption. A five percent usage ratio is, when one looks back as far as 1926, close to one of its lowest points. This low usage ratio is causing worldwide concern. Brusnahan noted that getting back to a usage rate above the 20 percent range is highly unlikely. He said he believed that a ratio in the 10 percent range was far more possible if farmers can get in a really good crop this year.
Ethanol industry
Corn quality for the production of ethanol was very strong in the second half of 2010, which resulted in a close correlation between corn and ethanol prices. Profitability for ethanol producers has been very good in the last six months and the ethanol industry is running at almost 100 percent capacity.
Exports have also become an important part of the ethanol equation. Demand from the EU has been strong. Demand from Brazil has been particularly strong because sugar prices there have become too high. In addition, demand for DDGS is increasing. Some DDGS is being exported, though the majority of it is being consumed in the US. It should be noted that there was a brief spike in demand for DDGS from China in mid-2010, but that has currently tapered off. In addition, US pork producers are beginning to use DDGS because of the high price of corn.
Global supply and demand
Brusnahan noted that while the supply of corn worldwide has tightened, we are in no way running out. Globally, we have a 15 percent stock to usage ratio. He did point out that since the US is the primary producer of corn, if US production declines it will have a global impact. He also noted that while China’s imports and exports have been inactive the last few years, their corn supplies are low. He said if the US were to have a particularly good corn crop it would not be a surprise to see China import some of it.
World soybean demand has been relatively stable, when taken as a whole. Soybean exports have been running steady, with the majority going to China.
Supplies of wheat look fairly good. US supplies are “fairly adequate,” and globally there will most likely be some improvement, as it is unlikely that the US, Canada, Europe and Russia will all have a bad crop year at the same time.
Livestock
The livestock industry has had a difficult challenge over the last four years in the US, and many markets have adjusted as a result of the higher cost of feed, Brusnahan observed. Right now pork and beef seem to be doing the best, and the poultry and dairy industries seem to be having a more difficult time. There are 9.2 million dairy cows in the US, and a large percentage of those facilities are totally dependent on buying feed for milk production, particularly in western states where producers are unable to offset feed costs by growing the crops themselves.
Pricewise, cattle and swine production have been doing the best. The egg industry has been volatile for a number of reasons. Pork supplies are, for the most part, stable. Per capita meat consumption has also been fairly stable. After experiencing a drop in consumption, the poultry industry is beginning to see more consumption, largely because of higher prices for pork and beef.
Pork exports have been “phenomenal,” Brusnahan said and this is fueling the current high prices for pork. Exports to China and Japan have been a huge benefit for US pork producers as pork is a major meat protein for China, and China consumes approximately half of all pork produced in the world. This is also helping drive the demand for US soybeans as a feed source for pork.
Right now beef inventory is low, but beef margins have been relatively good. This has helped dairy producers; as they cull their herds they are able to return a favorable cash flow to their operations as they replace their dairy cows with fresh heifers. However, Brusnahan noted that cattle and cow calf producers nationwide have been facing a difficult decision in whether to use existing acreage for crops or for pasture, given the high price of corn. This could be in part what is fueling high beef prices.
Poultry
While the broiler market has recovered, it is not highly profitable, and most returns in January and February were negative. Going forward there should be improvement in March’s numbers for most US poultry companies. Within the global arena the US is a large consumer of broilers, so this has helped stabilize the overall sector. Russia has recently begun importing fewer US broilers, and while this does not appear to be having a significant impact at this point, it is definitely an area of concern for US producers.
Summary
Corn and soybean March 1 stocks numbers were lower than industry analysts expected. The first statistical data point for 2011 corn supplies was dramatically bullish, which means that not enough acres were planted. Since July, 2010 there is no evidence to date of supply rationing, and corn and soybean prices will now likely stay strong into late June/early July.

To hear and view Tim Brusnahan’s presentation in its entirety, go to http://www.wattevents.com/ to access the archive of the WATT Online Animal Forum: Feeding the Globe. All five presentations will be available for view at no cost until July 6, 2011.

US farm prices for corn, soybeans increase

The USDA WASDE report for December 10 is little changed from the previous estimates in November. Imports of corn increased by 5 million bushels and exports declined by a similar quantity. The publication of the report has had little impact on the CBT quotations for corn.
With respect to soybeans, yield was decreased slightly impacting production by less than 1%. Ending stocks declined by 48% to 165 million bushels mainly due to an increase in exports.
Soybean meal supply and utilization remained fairly constant from the previous estimate.
Consistent with domestic and international trends, average farm prices for corn, soybeans and for soybean meal increased, as shown in the following tables.

AccuWeather issues soybean risk warning

AccuWeather.com said the Midwest soybean and corn crops may be stressed by high temperatures the week of July 18. Hot, dry weather moving into the region will produce the hottest temperatures of the year, according to agricultural meteorologist Dale Mohler.
Look for three days of temperatures in the mid to upper 90s in Missouri, Iowa and Illinois. Mohler said soybeans have the greatest need for moisture in August when they go through the pod-filling stage.

Record soybean harvest in South America impacts U.S. market

Two South America countries this year will produce record soybean crops, causing concern that demand will wane for U.S. supplies, as well as a market reaction. The U.S. Department of Agriculture said Argentina and Brazil will produce 4.48 billion bushels of soybeans, a 36 percent increase over last year, bumping global inventories to 63.8 million tons.
The U.S. is the largest producer and exporter of soybeans, which is the country’s second biggest crop behind corn. But these record South American crops, which follow a harvest impacted last year by drought, and the expectation that farmers in the U.S. won’t be able to get this crop in the ground quickly, caused soybean futures to drop.

Recent Illinois soybean results atypical

The Illinois Soybean Association is encouraging farmers to consider multi-year data on seed varieties before deciding what to plant in 2010. It said that 2008 and 2009 statistics on the performance of seed variety studies were unusual because of heavy rainfall in both years.
"I would say 2009 was a year of extremes around the state, with soybean yields all over the map," said Vince Davis, University of Illinois Extension soybean specialist. "For example, farmers in northern Illinois who planted varieties not susceptible to white mold had above-average yields. Meanwhile, aphids moved farther south than usual this year and were around later in the season. For farmers in that situation, the learning curve was steep and yield losses were large where scouting and applications were not timely. Yet statewide, insects were not too bad in 2009."
The online Varietal Information Program for Soybeans includes performance data on hundreds of soybean varieties across multiple seasons in Illinois. University of Illinois also posts variety trial data.