01-03-2013 01:24 PM - edited 01-03-2013 01:26 PM
I just received this note across my desk. Though this market source is located in Chicago, he has multiple contacts in his native country of Brazil. Does he have AAA? I don't care. So, he's well connected in South America. He writes:
"I just now read the following statement in a well followed ag newsletter, released about 30 minutes ago:
“China is active in seeking US February soybeans to lock in those (record) margins since logistics from Brazil are widely expected to become snarled amid their monstrous shipping program for sugar, soybeans and even corn.”
I am sorry, but this statement is simply irresponsible. The statement implies that China is looking for additional orders for US beans in Feb because of possible logistic problems in BR during that particular month.
Newsflash: BR will be just about done with their corn exports by the end of this month. The country has cleared out logistics to focus on beans from Feb through at May/June.
Sugar and new crop corn shipments will NOT be a factor until at least June.
I repeat (and this morning’s cancelation only verifies this theory): In my eyes, China is just about done with new purchases of old crop beans from the U.S. We still have just about 5 MMT committed but unshipped beans to go out and by time they go out it will be early-mid Feb and from that point on, BR is the focus…
Without a major weather scare in SA (Argentina still is a charade as their own private estimates range from 45 to 55 MMTs with not many really sure what will be the final effects of the excess rains and delays), I do not see a reason for March beans to stay sustainably at the current levels. We might get a bounce one of these days and all… but right now I do not see a reason to chase any strength in beans whatsoever… I think the perma-bulls may be in for a rude awakening once they realize that BR will have a huge crop (83 MMTs + as I wrote about a few weeks ago) and also realize that China import pace will severely decrease in the next few weeks."
It is interesting to hear the different perspectives, I think.
01-03-2013 01:54 PM
Mike, I do not know how to break this to you, but I read several weeks ago, that Brazil was not going to be able to ship the beans that China was attempting to buy. I think the report is accurate. They do not have the port facilities to handle all of their exports, and the US will be their market or they can revert to their former diet of a fishead and a bowl of rice. It does not matter if China buys all their grain, if they cannot get it on a ship. Better reconsider your information.
I think American Farmers can see through the ruse, we have been too many times. Everyone knows that these markets are going to be pushed down and the USDA report this month is going to add further downward pressure, becasue RMA will be setting the Crop Insurance Price in this country. Most of us have seen this movie before. Good luck with your speculators. Adios Amigo. John
01-03-2013 02:11 PM
I will not go all the way down that road with you John.
You weren't here a few weeks ago when the pictures of a ship arrived from Brazil loaded with 1800 semi loads of corn and was off loaded at a port in Florida. This all happened while we were still getting reports of "they have ships of fert to unload" before they can plant. There are at least three more here or on the way.
Controlled chaos might be a good description, but things are getting done down there.
Careful about being an American't,,,they have a dog in the hunt too.
01-03-2013 03:06 PM
Hobby - I knew I would get your attention, I seldom invade the marketing thread because everyone knows I don't know jack! But . . . But in the scheme of things 1800 semi loads of corn is what . . . 1,800,000 bu. at the most. How long will it take 97000 sows and 1.8 million pigs (annual production) at Premium Standard Farms aka Murphy Brown in Princeton to consume that grain. It is didly isn't it?
I am not worried too much about the corn market right now, because last year we had subsoil moisture, this year much of that is gone in Ioway I hope to get the inside skinny on the weathr on the 18th of January at the farm and land expo in West DSM, when our noted weather guru Elwyn speaks. He was right on last year. 'The speculators might want to lift their short positions before he utters his prediction. lol.
It has been 45 years since I raised pigs, how many bushels of corn does it take to get a pig to market? How many bushels does a sow eat each year?
How much corn does Murphy-Brown have to purchase a year to feed all those pigs. Larry, Moe, and Curley will be making sure we push down prices with their next report. What a joke! Adios Amigo. John