Soy commentary: Soybean futures surge on Arg. weather, US crush

Soybean futures for delivery in March on the Chicago Board of Trade rose for the fourth straight day to hit a 10-week high on further fears that a write-down of Argentina’s crop would choke soybean meal supply.

March futures opened at $10.16/bu, surged to $10.24/bu and was valued at $10.22/bu at time of press, meaning futures have risen 5% in a little more than a week.

However, that stands against nine days of gains in soymeal that has seen the contract rise 12% to hit a seven-month high of $374/st.

“There is potential for light precipitation through the weekend (in Argentina), but the general trend points to many key growing areas remaining dry. The trade is trying to handicap how the globe is going to manage limited availability to Argentine soy meal,” a note from Benson Quinn Commodities said.

The worries about Argentinian weather came as the National Oilseeds Processors Association said that January’s crush level was 163 million bushels, down from 166 million in December and short of trade estimates, but a new record for January.

Elsewhere, other news was mixed with the board of commerce in Rosario saying that commitment for exports so far this year are zero despite 8.5 million mt being bought by exporters – largely due to concerns over the crop and the gradual reduction in export taxes.

And in Brazil, the harvest in Mato Grosso – Brazil’s biggest soybean producing state -  remains 3 percentage points behind the pace at 28.7%, with the IMEA warning that there are some indications of poorer yields that are “not representative” yet.

Offers out of Brazil remained at around 77-78 cents over March futures for March loading and 59 cents over May futures for April loading.

That stands versus Paranagua paper value of around 61 cents for March loading over March futures and 48 cents over May futures for April loading.

Agricensus assessed March FOB Santos cargoes at 67 cents over March futures and April at 54 cents over May futures, equating to a spot value of $400.50/mt FOB Santos.

In the US basis bids for US Gulf barges were steady and little was heard.

Agricensus kept its assessment for basis value steady at 43 cents and 37 cents for March and April loadings over March and May futures.

In Europe offers were heard around $420/mt for March delivery while China was valued at a $1.56/mt premium over March futures for delivery 40-60 day out, equating to $433/mt CIF.