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Monday Morning Soybean Update by Nate Smith (Feb 21, 2012)
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Soybean prices closed 9 1/4 cents higher on Friday. The Chinese officials visiting the US last week approved large purchases of Soybeans which captured the attention of traders. The Delegation announced deals to buy 4.8 mmt of Soybeans. This was in addition to the private sale or 2.75 mmt of new crop soybeans to China as well as 173 tmt of old crop.  While much of this is not official sales its a general agreement to purchase that amount of soybeans.  Volume on Friday was
172,525, Meal 73,694,  88,500. Funds were net buyers of an estimated 4,500 Soybeans, 3,100 Oil and 2,300 Meal.

Opening Call, slightly higher. This morning the USDA announced the private sale of 250,000 mt of US soybeans to China for the 2012/13. Oil world says it may cut the Brazil Soybean crop forecast because of continued poor weather. They warn of a potential global soybean deficit if yields continue to decline. They estimate total South American soybean production to be declining by 12-13 mmt from last year.  Weekly commitment of traders report shows Index funds reduced length in soybeans by 1,124, Oil positions grew by 2,548 and Meal increased by 1,342. Managed funds  increased bean length by 18,186, Meal up 956 and Oil length increased by 16,600.

Opening Call 1-2 higher.

Top News
-- China’s Agriculture Ministry is urging authorities in the country’s major Corn and Soybean growing northeast to be fully prepared for a possible drought this spring.  Since fall rain in the northeast has been 30% to 80% less than normal which has reduced water supplies
-- During January palm oil imports by China were pegged at 443,261 mt a rise  of +7% on the year, acc. to gov't stats.  Soyoil imports for the month were pegged at 128,500 mt down -20% from the year ago month
-- During January soybean imports by China were pegged at 4.61 mln mt a drop of -10% on the year, acc. to gov't stats
-- U of IL ag economist says export activity and likelihood Latam production will fall short of current projections, US Corn and Soybean exports for the current year are expected to exceed current projections.
-- Crop analysts Cordonnier weekly report shows he left his Argentine Soybean production unchanged at 47.0 mln mt and Argentine Corn production also unchanged at 20.0 mln mt
-- Crop analysts Cordonnier weekly report shows he lowered his estimate for Brazil Soybean production by 1.0 mln mt to 68.0 mln mt .  He left his Brazil Corn production unchanged at 58.0 mln mt
-- Indonesia vegoil industry group says the country plans on expanding its palm oil exports to Pakistan to more than 800,000 mt/yr compared to the current 178,000 mt exported there last year, after signing trade agreement in early Feb
-- EPA says the government has approved health studies of Biofuel E15 taking it a step closer to approval for sale, some suggest sales could begin bfore summer
-- Kraft Foods reported 4Q revenue of $14.69 billion, net income during the quarter was $830 mln.  Earnings per share was 57c on unadjusted basis, on an adjusted basis they were 47c/share
-- Pending Tender:  Cash traders say Feb 17th is bid deadline in a 23,400 mt RBD palm olein tender floated by India seeking Malaysian or Indonesian origin olein.
-- Pending Tender:  Cash sources say Feb 22nd is tender deadline where Taiwan's BSPA group is seeking 40,000 to 60,000 mt of Brazil or US Soybeans for shipment in late March to April period
-- Pending Tender:  Traders also say Feb 22nd is bid deadline for 30,000 mt Sunseed Oil tender floated by Egypt's FIHC, with the vegoil expected for arrival between Mar 20th & Apr 20th
-- Pending Tender:  Traders say Feb 22nd is bid deadline for 20,000 mt Soyoil tender floated by Egypt's FIHC, with the vegoil expected for arrival between Mar 20th & Apr 20th
-- Dalian Sept. Soybean futures were up + 15 @ 4,431 yuan/mt.
-- Dalian Sept. Soymeal was down  -7 @ 3,070 yuan/mt.
-- Dalian Sept. Palm Oil was down -26 @ 8,3040 yuan/mt., Sept. Soyoil was down - 20 @ 9,382 yuan/mt.
-- In Malaysia May Crude Palm Oil futures were 3,268 ringgit/mt., range on the day was 3,274 to 3,230.
-- In Malayia Crude palm oil cash markets had no trades went out bid 3,200 offered @ 3220 ringgit.
-- Liffe May Rapeseed futrures were down - .75 @ 456.75 euros/mt.
-- CBOT Soybean Volume & Open Interest for February 17th 2012 was 172,525; Open Interest increased +3,507 to 548,299.
-- CBOT Soybean Oil Volume & Open Interest for February 17th 2012 was 88,500; Open Interest decreased -3,241 to 307,344.
-- CBOT Soybean Meal Volume & Open Interest for February 17th 2012 was 73,694; Open Interest decreased -2,266 to 181,797.
-- Weather: 6 – 10 Day Forecast: Normal to Below Temps. Normal to Above Precip
-- Outside markets. Crude Oil up $1.43 @ $105.03; Gold up $21.80 @ $1747.80 ; Silver up 68c @ $33.90 ; US $ index off -25 pts @ 79.20

Cash Markets
-- CIF Soybeans steady.  Feb. +76 to +79, FH Mar. +72 to +??, Mar. +72 to +78 Apr. +62 to +67, May +62 to +68, June/July +64 to +68, Aug. +65 to +??, Oct. +70 to +73

Nate Smith
Gulke Group
Phone: (312) 896-2090
Fax: (312)896-2052
Cell: (630)247-6507
nsmith@gulkegroup.com


 
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