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Wednesday Morning Soybean Update

Jan 11, 2012

Soybean Prices declined slightly on Tuesday closing a penny lower. With Rain falling in Argentina yesterday beans were unable to extend their gains from recent sessions. Hot dry conditions  were relieved by the rains and traders attention now turns to the next round of expected precipitation and Thursdays important USDA Crop report. Volume was moderate on Tuesday. Soybeans traded 147,287, Meal 53,609 and Oil 81,097. Funds were net sellers of an estimated 3,300 Soybeans, 2,000 meal and bought 2,000 Oil.
Opening Call lower. Welcome rain fell in Argentina’s grain and oilseed production region Tuesday. Most of the region from eastern and southern Santiago del Estero and southwestern Chaco to Buenos Aires and La Pampa received rain. Amounts of 0.40 to 2.28 with a maximum of 3.53 inches in northwestern Santa Fe.  The rain brought significant relief to recent dryness. Paraguay's Agriculture Ministry say an important percentage of the Soybean crop is lost. They noted 40% of the crop is affected with 25% of that permanently lost. Early season estimates for Paraguay had the crop at 8.4 to 9.0 mmt new estimates are closer to 7.0 mmt. Outside markets are expected to pressure the soy complex this morning. $USD is trading 50 higher, equities lower, Crude down .90 cents.
Opening Call: Soybeans 10-12 lower, Meal $2.00 to $3.00 lower, Oil .40 to .50 lower.
Top News
-- Paraguay’s Agriculture Ministry says an important percentage of the country's Soybean crop is lost, due to dry weatther.  Analysts had been expecting the crop 8.4 - 9.0 mln mt, but estimates are now around 7 mln mt
-- State run food corporation in India bought 15,000 mt refined palm olein on Wednesday for a reported $1,043 mt cif in January.
-- State run food corporation in India however did cancel the tender for 3,000 mt of crude Soyoil it had been seeking in a tender that closed on Wednesday
-- Analysts surveyed expect 11/12 Soybean annual production at 3.04 bln bu that's near the December USDA report reading of 3.046 bln bu and below 2010's 3.33 bln bu.  The data will be released on Thursday morning at 7:30 am CT.
-- The average US national Soybean yield estimate by grain analysts for Thursday's USDA report is seen at 41.3 bu/ac, unchanged from December's report and well below 2010's 43.5 bu/ac.
-- In Thursday's USDA supply/demand report, US Soybean ending stockpiles for the 11/12 marketing year are forecast by grain analysts at 0.23 bln bu little changed from the December report's 0.230 bln bu.
-- Analysts looking ahead to Thursday's USDA supply/demand report expect US wheat ending stocks at 0.84 bln bu down from the December report's 0.878 bln bu.
-- USDA quarterly grain stocks data will be released at 7:30 am CT on Thursday, Dec 1 Soybean stocks are seen at 2.31 bln bu that compares to the year ago figure of 2.278 bln bu and up from Sept 1 stocks data of 0.22 bln bu.
-- Pending Tender:  Cash sources also note 14,000 mt of US/Latam Soymeal and 10,000 mt of EU sunseed meal is being sought by Israeli group in a Jan 11th tender deadline.  Shipment is expected Feb 20th to Mar 10th for the soymeal
-- Pending Tender:  Cash sources day January 12th is tender deadline for India's MMTC to purchase 21,000 mt of RBD palm olein.  The vegoil is for shipment by Jan 30th
-- Pending Tender:  Cash merchandisers say the state run trading corp of Bangladesh is seeking 4,000 mt of Soyoil in a Jan 19th tender deadline
-- Dalian Sept. Soybean futures were down - 5 @ 4,369 yuan/mt., Sept. Soymeal was down - 8 @ 2,973 yuan/mt
-- Dalian Sept. Palm Oil futures were down - 32 @ 8,166 yuan/mt., Sept. Soyoil as down - 10 @ 9,114 yuan/mt.
-- In Malaysia Mar. Crude  Palm Oil futures were up + 18 @ 3,233 ringgit/mt. , range on the day was 3,233 to 3,194.
-- Crude Palm Oil cash markets in Malaysia had no trades went out Bid 3,220 Offered @ 3,240 ringgit/mt.
-- Liffe Feb. Rapeseed futures were up + 2.00 @ 457.75 euros/mt.
-- CBOT Soybean Volume & Open Interest for January 10th 2012 was 147,287; Open Interest increased +1,713 to 460,331.
-- CBOT Soybean Oil Volume & Open Interest for January 10th 2012 was 81,097; Open Interest increased +953 to 277,899.
-- CBOT Soybean Meal Volume & Open Interest for January 10th 2012 was 53,609; Open Interest increased +1,157 to 183,497.
-- Weather: 6 – 10 Day Forecast: Normal to Above Temps. Normal to Above Precip
-- Outside markets. Crude Oil off -50c @101.73; Gold up +$8.40 $1639.90; Silver up 1c @ $29.81; US $ index up 44 pts @ 81.55
Cash Markets
-- CIF Soybeans up 2.  Jan. +60 to +64, Feb. +60 to +63, Mar. +58 to +63, A/M +54 to +58, June +51 to +57, July +52 to +??, Aug. +?? To +60
Nate Smith
Gulke Group
Phone: (312) 896-2090
Fax: (312)896-2052
Cell: (630)247-6507