by Chris Lyddon
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The arrival of new crop soybeans on the world’s market has put oilseeds under pressure, but currency movements and logistical problems have provided a more bullish impetus at times.

“With harvesting now under way in South America and forecasts pointing to bumper outturns in the key producing countries, world soybean markets softened in the period since the last GMR, with the IGC GOI sub-index dipping by about 5%,” the International Grains Council (IGC) said in its Grain Market Report at the end of February. “U.S. futures were little changed in a month of choppy trading. While sentiment was weighed by favorable crop prospects in the southern hemisphere, losses were capped by better-than-expected export sales and concerns about logistical difficulties in Brazil.”

Currency movements provided additional support at times, while some worries about localized flooding in parts of Argentina underpinned in late February, the IGC said.

“With U.S. basis levels pressured by a seasonal shift in demand to new crop supplies in South America, Gulf export quotations fell by $13, to $339 fob,” it said.

“Against the backdrop of ample availabilities and beneficial conditions for developing fields during most of February, Up River prices in Argentina weakened by $19 to $321 fob,” it said. “In Brazil, prospects for a record outturn weighed on market sentiment, but losses were capped by support from loading delays at the country’s ports owing to earlier wet weather and heavy export sales. Export values (Paranagua) eased by just $5, to $330 fob.”

ICE canola futures in Canada softened by up to 6% on currency movements and adequate supplies, while weakness in soybean markets also weighed at times, it said.

“E.U. (Matif) rapeseed futures eased marginally against the backdrop of benign weather conditions for the new crop, although losses were capped by a recovery in energy markets,” the IGC said.

In its Oil Crops Outlook for March, the USDA’s Economic Research Service (ERS) said that at least 40% of Brazil’s soybean harvest was completed by early March. “Brazil soybean shipments for February, which topped two million tonnes, signal a fast takeoff for new-crop exports,” it said, noting that the USDA raised its forecast of 2015-16 soybean exports from Brazil to a record 58 million tonnes, a rise of 1 million from its estimate a month earlier. “This higher demand for soybeans is anticipated to reduce September stocks by a like amount.”

The bulk of Brazil’s soybean exports are headed for China, it said. “China’s soybean imports for 2015-16 are forecast 1.5 million tonnes higher this month to 82 million. Compared to a year earlier, cumulative soybean imports for October 2015-January 2016 were ahead by 2.2 million tonnes (9%). Over the next few months, China import gains should continue based on large recent shipments by major exporting countries. The 2015-16 soybean crush in China is expected 1.1 million tonnes higher to 81.8 million.”

In its Agri Commodities Monthly, Rabobank predicted that soybeans would continue to trade in the range they’ve occupied for the last six months. “Soybean fundamentals remain bearish,” the bank said. “However, futures have gained some support from outside factors lately.”

Rabobank also commented on strong exports from Brazil and Argentina, but suggested that logistical problems could mean temporary price upsides.

“However, this does not negate the fact that South American exports will be large over the course of the marketing year, also due to the ongoing weakness of the Brazilian real and the Argentina peso, which will suppress U.S. market share,” it said.

However, a report from the U.K.’s AHDB Cereals & Oilseeds, produced in mid-March, well after the Rabobank report, noted a recovery in the Brazilian currency, which had risen to an over six-month high against the U.S. dollar.

“The strength of the Brazilian real, as well as strong demand for U.S. soybeans, helped to support U.S. soybean prices last week,” it said. “Another price-supporting factor has been delays faced by soybean shipments in Brazil, with ship line-ups of up to 57 days reported at southern ports.”