Soy commentary: Futures, cash stable as WASDE fails to surprise

Futures and cash prices were relatively stable on Thursday on a price-neutral WASDE day, as Brazil basis bids firmed a nudge on a weaker real and US basis bids were steady.

The March contract on the Chicago Board of Trade was pegged at $9.87/bu at 1800 London time, a cent down on where it was at the same time on Wednesday after a choppy day of trade that saw it hit a high of $9.96/bu and a low of $9.77/bu.

Argentinian weather was again the focus of the market with both Buenos Aires Grain Exchange (BAGE) and the USDA cutting their production forecasts for bean production in the current harvest, although they came up with very different numbers.

BAGE cut 1.5 million mt from its previous forecast to 50 million mt, while the USDA slashed its export forecast 2 million mt to 54 million mt.

But while that looked like a bullish picture, the USDA also increased its Brazil output 2 million mt to 112 million mt, in line with other analyst projections, to leave its South American production largely unchanged save a small adjustment to Paraguayan production.

The US, however, showed a different picture, with the USDA raising its ending stocks to 530 million bushels (14.4 million mt), up 60 million bushels and cutting its export figure by the same amount.

“The USDA report appears to be neutral to bearish soybean complex,” Terry Reilly of Futures International said.

“The USDA was conservative in making changes to the SA production and demand estimates, despite weather problems for Argentina and growing production estimates for Brazil soybeans,” he said.

In the physical cash markets, traders spoke of more than 20 cargoes being bought out of Brazil this week and headed for China and a weaker real pushed up basis bids a nudge, despite what brokers said was healthy farmer selling.

Agricensus assessed FOB Santos at a 67-cent premium over March futures for March loading and a 56-cent premium over May futures for April loading, leaving spot at $387/mt FOB.

In the US, basis bids were largely, unchanged and Agricensus kept its FOB US Gulf assessment at a 40-cent premium over March futures for March loading and a 35-cent premium over May futures for April.

That valued spot cargoes at $377/mt FOB USG.

In China, 8.5 million mt of soybeans were imported in January, up 10.7% on the same month last year, but down on December’s levels.

Levels were still pegged for spot at around 155-158 cents over March futures, which equated to $420/mt.

In other news, US net export sales of soybeans reached 743,200 mt for the 2017/2018 crop, more than double last week’s volume, up 11% on the four-week average and above the top end of the 400-800,000 mt trade estimates.