Soy markets seen to shift attention to South American crop

 

 

The markets are expected to see China and other countries shift their attention from US soy and begin purchasing South American soy.

 

Brazil and Argentina are expected to produce record soy crops in 2010. The earliest planted soy fields in Brazil were slated for harvest in early January, said Mike Krueger, The Money Farm president, of Casselton, North Dakota.

                                                                           

''The expectations are that once South American soy become readily available in the marketplace, we're going to see demand from China shift away from the US and move down to Brazil and Argentina,'' Krueger said.

 

Frequent showers (about 2 inches) hampered fieldwork in key farming areas of central and northern Argentina. The moisture did help replenish long-term moisture reserves.

 

Up to an inch of rain fell in the southern growing regions of La Pampa and Buenos Aires. Wheat harvesting took place where possible, and soy was planted as a second crop.

 

From 0.2 to 2 inches rain fell in southern Brazil in late December and early January. Temperatures were above normal and reached from the mid-80s to above 90 degrees F. Conditions favoured growth of soy and other summer crops.

 

In eastern Mato Grosso and into Minas Gerais and Sao Paulo, rainfall totalled over 4 inches over the week timeframe.

 

Back in the US, at the CME Group exchange, the futures contracts on January 8 closed with March at US$10.19, May at US$10.26, July at US$10.29, August at US$10.27, September at US$10.10, and November at US$9.97 per bushel.

 

Compared with prices on December 22, March was 21 1/2 cents higher, May was 23 1/2 cents higher, July was 21 1/2 cents higher, August was 23 cents higher, September was 22 cents higher and November was 14 cents higher.

 

The USDA reported US soy export sales - for the week between Christmas and New Year Day - of 726,100 tonnes. Traditionally, any weekly soy sales report over 20 million bushels was considered good.

 

By December 31, the 2009-10 soy export sales number had reached 88.5% of the USDA forecast against 64.2% for the five-year average.

 

At one elevator in western Minnesota followed in this column, cash soy on January 8 were US$9.51 per bushel, with a basis of minus 71 cents.

 

Compared with the price on December 22, soy were 29 cents higher, but the basis had widened by 2 cents.

 

The soy industry was keeping an eye on the USDA's January 12 crop production report, which was considered the final numbers for the 2009 crop size.

 

Prior to the January report, the USDA had estimated 2009 soy production at a record 3.32 billion bushels, up 12% from 2008.

 

The 2009 crop year marks the first US soy crop over 3 billion bushels since 2006, when production reached 3.2 billion bushels. Soy production in 2007 was 2.68 billion bushels, and in 2008, reached 2.97 billion bushels.