Soybean commentary

Soy commentary: Market shrugs off export sales to end week on high

23 Feb 2018

Futures extended a seven-month high and were poised to rise for the third straight week as the market shrugged off some bearish export news and focussed on Argentina’s crop issues and China returned to purchasing.

Beans for delivery in March on the Chicago Board of Trade looked set to rise for the seventh day out of nine, opening at $10.32/bu, hitting a high of $10.39/bu and by 1800 London time, they were valued at $10.37/bu.

The market briefly dipped during the day after news broke that weekly net export sales were -109,000 mt versus analyst estimates of net sales of 600,000-900,000 mt.

But fears about Argentinian weather offset any short-term concern.

“There are some rains in the extended forecast but at this stage looks to be too little too late for beans that are setting pods and corn that is in late fill stage,” Benson Quinn Commodities said in a daily market note.

In other news, the USDA reported export sales of 106,000 mt of soybeans for delivery to unknown destinations with 40,000 mt sold out of the current marketing year and 66,000 mt out of next year’s crop.

In Argentina, domestic demand was heard around 6,000 pesos per tonne again, which equated to a tad over $300/mt at current exchange rates. Little was heard and selling remains sluggish on the poor harvest.

Agricensus moved its assessment in line with futures.

In Brazil the paper market was quiet and largely unchanged with March pegged at 60 cents over March futures and April at 51 cents over May.

With regards to cargoes, no spot offers or bids were heard, although May was heard offered at 65 cents over May futures.

Agricensus kept the premium assessments steady and the FOB price moved up in line with futures and spot was valued at $405.25/mt FOB Santos.

In the US, CIF barge premiums were pegged slightly higher on the prompt at 38 cents over the relevant futures for March and 32 cents for April. No cargo indications were heard for either month, although May was heard offered at a 46 cent premium over May futures.

Agricensus nudged up its FOB assessment to reflect higher CIF bids and assessed at 47 cents for March and 41 cents for April, giving a spot price of $399/mt FOB USG.

In the cash markets China was heard to have returned to the market and did deals at $1.57 over March futures for US Gulf and $1.62/bu over the same futures for Brazil.

With March futures at $10.37/bu, that equated to $438.75/mt CIF for US material and $440.50/mt CIF for Brazilian material.