Re: Floor Talk February 29
Early crop estimates released for the upcoming March 9 WASDE Report.
Argentina corn production=From 22 to 21 mmt
Brazil corn production=From 61 to 60.5 mmt.
Allendale sees U.S. exports raised this month. "It is likely feed use will be raised in April after the March 30 quarterly Grain Stocks report," according to an Allendale press release Wednesday.
Soybeans=Argentina production to be dropped from 48 to 46 mmt.
=Brazil production to drop from 72 to 70 mmt.
"Year-to-date US soybean exports would imply a pace weaker than USDA's February estimate. However, this next revision in South American production should encourage a higher export estimate," Allendale states in the release.
Wheat - USDA to raise wheat exports.
What say you? Do you think Argentina's corn estimate is low enough? What about that Brazil soybean number? Do you see it dropping into the 60's?
China and soy crush margins
It's very interesting to me that analysts stick with preconceived notions of what drives imports of soy by China. Crush margins are viewed as the be all and end all of soy trade. That might be valid in a free market. China is not a free market for soy. Nor are other grains. Never has been. The government is the large shadow controlling imports. There are import duties and other features not found in a free market. Some Chinese government entities are exempt from restrictions and import according to policy not determined by crush margins.
That's the way it is. On the other hand I find it mildly disturbing that grain analysts routinely appear to be oblivious of how China's import policies work and how they manipulate prices internally. China is consistent and the information is widely available to be understood. The fact that analysts are 'surprised' by routine Chinese behavior but never bother to figure out why is probably a good measure of the advantage ideology has over factual understanding in our culture when it comes to economics.
Re: Floor Talk February 29, BreanaW, we
may see back toward fall, say 14 to 14.50.
Bean demand function is very strong.
BR crop size is not what was expected and weather favors a big 2nd corn crop there.
This spring cash trade range usa is 13.50 to 14.50 on the downside with a 16.50 upper middle.
There is over a 35% probability of a $17.75 or slightly higher cash top in 012.