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News Flash – February 13 2014


WASDE: U.S. Soybean Supplies Raised to 3.46 Billion

U.S. soybean supplies are up 5 million bushels to 3.46 billion due to higher projected imports from Canada. Soybean exports for 2013/14 are projected at 1.51 billion bushels, up 15 million from last month due to the record pace of shipments and sales through January. While global imports remain the same, increased export projections for the United States, Brazil, and Paraguay are offset by a reduction for Argentina. Increased U.S. soymeal exports are offset by reduced domestic use, leaving soybean crush unchanged at 1.7 billion bushels. Residual use is reduced 10 million bushels this month on tightening supplies, driven by heavy use to date and large outstanding export sales. The 2013/14 season-average soybean price range is projected at $11.95 to $13.45, up 20 cents on both ends. The soybean oil price projection is lowered 1.5 cents at the midpoint with the range narrowed to 34.5 to 37.5 cents per pound. Global oilseed production for 2013/14 is projected at 506.0 million tons, up slightly from last month. Global soybean production is raised 0.9 million tons to a record 287.7 million. Soybean production for Brazil is projected at a record 90.0 million tons, up 1.0 million from last month on higher yields reflecting early harvest results. Prospects for the Argentina’s soybean crop have diminished due to an extended period of hot, dry weather through January. Global sunflowerseed production is projected at 43.3 million tons, down 0.4 million due to reduced prospects for Argentina. Other changes include reduced cottonseed production for China, Pakistan, and Australia, and increased sunflowerseed and rapeseed production for Kazakhstan. February changes for global oilseed, product supply and use include: reduced soybean crush, soybean meal, and soybean exports for Argentina, reduced soybean meal imports for the European Union, and increased soybean and soybean meal exports for Brazil and the United States. Global oilseed stocks are projected higher, mostly reflecting higher soybean stocks in Argentina. AgWeb


Soybean Switch on U.S. Corn Farms Expanding World Surplus

Farmers are switching from corn to soybeans, which are cheaper to grow and profitable for the first time in 4 years. Across the Corn Belt, growing corn had been an easy choice for farmers since 2009. Annual revenue was $150 per acre more than soybeans on average for farmers. This year, lower prices mean both corn and soybeans will earn $10

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to $20 an acre. Farmers in the U.S., the world’s second-largest soybean grower, will boost planting by 5 percent to a record 80.391 million acres, a Bloomberg survey revealed. As record crops, are harvested in Argentina and Brazil, prices will slump 28 percent to $9.50 a bushel in Chicago within a year. Soybean futures on the Chicago Board of Trade are down 6.1 percent in the past 12 months to $13.23. Corn tumbled 37 percent over the same period. Cheaper soybeans will

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be used to make cooking oil and biodiesel, and will boost profit margins for processors and record supplies of vegetable oil. This will help drive down global food costs, prices which are already are down 15 percent from a record in February 2011. Global production in the year that began Oct. 1 will rise 7.2 percent to an all-time high of 287.7 million metric tons from a year earlier, led by record harvests in Brazil, Canada, Uruguay and Ukraine, the USDA said Feb. 10. The main corn-planting season in the Midwest is still two months away, and good weather may encourage farmers to sow more corn than forecast because the grain offers bigger potential yield gains than soybeans, which means higher output can more than make up for lower prices. Hedge funds and other large speculators remain bullish. Their net-long position is up 7.2 percent this year at 146,533 futures and options contracts, the highest since the end of December and the most for this time of year since 2011, U.S. Commodity Futures Trading Commission data show. Bloomberg



Russia Seen by Oil World Processing Record Oilseeds in 2013-14

Russia’s oilseed processing may top a record in the 2013-14 season as farmers harvested the biggest sunflower and rapeseed crops ever. Oilseed crushing will rise to about 13 million metric tons in the 12 months ending in September, 17% higher than last season Oil World said. Increasing processing capacity and a jump in soybean imports will also contribute to the gain. Russia’s sunflower harvest, the world’s second-largest, after Ukraine, will climb 28 percent from the prior year to 10.2 million tons, according to the U.S. Department of Agriculture, which estimates that the country’s rapeseed crop will be a record 1.4 million tons. “Oilseed crushings are seen rising to unprecedented levels this season, driven by the all-time high Russian sunseed and rapeseed crops harvested in 2013 as well as the skyrocketing imports of soybeans,” Oil World reported. Oilseed exports are also increasing from Australia, which saw record shipments of canola in November and December totaling 820,000 tons. Australia has benefited from a “logistical nightmare” in top canola exporter Canada, which has seen a shortage of rail cars after bumper oilseed and grain crops. Canada’s canola crushing and exports totaled 6.2 million tons from August through December, down 5.7 percent from the year before. Bloomberg


Grains mixed in cautious trade ahead of USDA report

U.S. grain futures were mixed on Monday, as investors readjusted positions ahead of the U.S. Department of Agriculture’s closely-watched monthly supply and demand report due that day. On the Chicago Mercantile Exchange, corn futures for March delivery fell to USD4.4013 a bushel during U.S. morning hours, before trimming losses to trade at USD4.4163 a bushel, down 0.55%.CBOT March corn ended Friday’s session with a gain of 0.28% to settle at USD4.4420 a bushel. Analysts expected the USDA to raise its 2013-14 corn export forecast later on Monday to reflect the strong pace of U.S. corn shipments in recent weeks. CBOT March corn rallied to a three-and-a-half month high of USD4.4720 a bushel on February 6, amid ongoing indications of robust export demand for U.S. supplies. Meanwhile, soybeans futures for March delivery rallied to USD13.3440 a bushel, just below the highest level since December 24, before slightly paring gains to trade at USD13.3413 a bushel, up 0.2%.The March soy contract settled 0.43% higher on Friday to end at USD13.3140 a bushel. Market players expected the USDA to lower its forecast of U.S. 2013-14 soybean ending stocks, reflecting strong export demand. Soy prices have been supported in recent sessions amid speculation that adverse weather conditions in Brazil will damage the quality of the crop and reduce global supplies. World Grain News



Palm Oil Rises to Six-Week High on Exports Amid Brazil Dryness

Palm rose to the highest level in six weeks on speculation that overseas demand may improve as dry weather damaged the soybean crops in South America. Palm oil for April delivery rose as much as 0.7 percent to 2,654 ringgit ($798) a metric ton on Bursa Malaysia Derivatives, the highest level for a most-active contract since Jan. 2. Exports from Malaysia, the second-largest grower, expanded 4 percent to 309,455 tons in the first 10 days of February from a month earlier. Rains in Brazil by the end of the week may not be enough for soil to recover adequate moisture, according to Gustavo Verardo, an analyst at Somar Meteorologia. Brazil is the largest exporter of soybeans, which can be crushed to make a substitute oil for foods and fuel. Soybeans for delivery in May climbed 0.3 percent to $13.1375 a bushel on the Chicago Board of Trade. The March-delivery soybean oil contract rose 0.2 percent to 39.08 cents a pound, strengthening for a fourth day. Refined palm oil for May delivery advanced 0.5 percent to 5,916 yuan ($975) a ton on the Dalian Commodity Exchange. Soybean oil rose 0.4 percent to 6,670 yuan. Bloomberg


Edible oil prices ease due to higher production expectations

Higher production of oil seeds has put prices of edible oils such as palm, soya, and groundnut oil under pressure this year. Coupled with weak domestic demand, the prices have come down significantly. While price of imported edible oil like soya oil and RBD palm oil has decreased about 11% and 7.5% respectively, sunflower oil saw a dip of 5.5% and grape seed oil declined nearly 16% compared to 2012 price level. Soya, Sunflower, Palm and other oils have seen a downward trend. However, palm oil has not declined as much as other oils because of demand for biodiesel. Wholesale prices of edible oils have come down by 10-12%, while retail prices have come down by 6-7%. Business Standard



North America Grain/Oilseed Review: Canola Drops Lower, March Below C$400

ICE Futures Canada canola contracts weakened on Thursday, setting fresh lows once again as speculators continued to add to their large short positions. Much of the activity was said to be tied to speculators selling canola and buying other commodities. The CBOT soy complex was higher, causing the spread between canola and soybeans to widen to record levels. Poor end user demand contributed to the declines, as the ongoing logistics issues across the Prairies have limited the ability of end users to actually follow through on purchases. About 71,237 canola contracts were traded on Thursday, which compares with Wednesday when 35,378 contracts changed hands. Western Producer