“While harvest pressure weighed on U.S. values, offers in Brazil posted marginal net gains as concerns about delayed fieldwork due to adverse weather underpinned,” the IGC said. Offers in Argentina were “a touch” weaker.
“U.S. soybean futures posted marginal net gains over the past month as initial declines were countered by support from a mildly bullish WASDE update, firmer international demand and ongoing worries about South American crop weather,” the IGC said, referring to the USDA’s monthly World Agricultural Supply and Demand Estimates report. “However, with basis levels weakening as harvesting across the Midwest progressed, Gulf export values were fractionally lower, at $374 fob.”
Nearby ICE canola futures rose by 3% m/m on good export demand and slow farmer selling, while a slowdown in fieldwork across the Canadian Prairies was also supportive in the first half of the month, the IGC said.
“MATIF rapeseed futures in the E.U. fell by 1% m/m, weighed by recent weakness in soybeans,” the IGC said. “However, declines were capped by concerns about new crop prospects owing to adverse weather at the time of seeding.”
In its Oil Crops Outlook report, the USDA’s Economic Research Service explained that Brazil’s big stocks would counter any delay in new crop.
“Soybean prices in Brazil have now strengthened to their highest level since February with declining stocks and depreciation of the country’s exchange rate,” the ERS said. “Since Sept. 1, more optimism for the U.S. economy precipitated a 4% gain in the value of the dollar against the Brazilian real. Farmers in Brazil are seen responding to a brighter price outlook by raising the 2017-18 soybean area by 200,000 hectares to 34.9 million — up nearly 3% from 2016-17. Soybean area gains are coming largely at the expense of summer corn area in southern Brazil.”
In September, crop planting in Brazil got off to a slow start with a delayed arrival of rainfall in the Center-West region, ERS explained.
“By late October, however, the rains suddenly returned,” the ERS said. “Soil moisture has improved, and farmers are nearly caught up on planting. By early November, the 2017-18 crop was 43% sown, about 10 percentage points behind last year’s pace but on par with the 5-year average. Compared to last year, this delay could postpone more deliveries of the new-crop harvest from January into February.”
Rabobank’s Agri Commodity Markets Research report said the bank had raised its expectations for CBOT soybean prices “as U.S. harvest yields and South American planting progress remain the key driving factors in the short term.”
Source: ISTA Mielke GmbH, Oil World; U.S. Department of Agriculture; World Bank.
Rabobank also reported that Brazilian soybean exports reached a record 4.3 million tonnes in September.
“Ample South American stocks together with a weaker real versus the U.S. dollar through September have increased the competitiveness of Brazilian exports,” Rabobank said. “U.S. exports remain above year-ago levels as strong export demand, particularly from China, continues to support markets.”
U.S. accumulated exports are up 40% compared to a year ago amid a record export pace to start the new marketing year, Rabobank said.
“Slow harvest pace in the U.S. may hamper the flow of commodities in the short term and therefore support U.S. domestic basis levels, particularly as export demand is forecast to remain robust,” Rabobank said. “With soybeans currently at 2.8 times the price of corn, U.S. farmers should be incentivized to sell soybeans over corn in the short term.”
Germany’s winter rapeseed area for harvest 2018 is down, according to initial estimates from the industry organization UFOP. The area is put at 1.283 million hectares, down 1.9% on the year and the lowest area since 2004.
“The decline in plantings is attributed to poor weather conditions, which meant that all intended plantings could not be carried out,” wrote Dr. Amandeep Kaur Purewal, senior analyst, AHDB Market Intelligence.