World Grain -- December 2015 - (Page 20)

GRAINMARKET REVIEW Oilseeds Bearish USDA report weighs on well supplied market Soybean prices (per tonne) 400 350 300 250 200 by Chris Lyddon 150 An increase in the U.S. Department of Agriculture's (USDA's) estimate for U.S. 2015-16 soybean production added to the overall picture of a well supplied oilseeds market and turned market sentiment in more of a bearish direction. "World soybean markets eased during November, with the IGC GOI sub-index falling by 3%," the International Grains Council (IGC) said in its Grain Market Report at the end of November. "Despite good underlying export demand, pressure stemmed from prospects for ample global supplies, with better than expected harvest results in the U.S. and improved planting conditions in South America." U.S. soybean futures posted losses of up to 3% over the month on a bearish supply outlook, highlighted by USDA's November WASDE report, which included upward revisions to forecasts for U.S. production and stocks, it said. "U.S. dollar strength pressured, as did talk that Chinese processors had secured new crop supplies from Brazil. However, losses were limited by supportive technical features, slow producer selling and ¿UPH[SRUWLQWHUHVWDV*XOIYDOXHVIHOOE\WRIRE,Q%UDzil, where plantings for the 2015-16 harvest are seen reaching a new SHDNH[SRUWTXRWDWLRQV 0DUFK GLSSHGE\WR ³,Q$UJHQWLQDVSRWSULFHVGHFOLQHGVOLJKWO\WRIREDVSUHVsure from weakness in the U.S. outweighed mild support from reluctant producer selling. ICE canola futures in Canada were narrowly mixed in November, with nearby contracts weighed by weakness in soybeans. However, losses were capped by slow farmer selling and strong local demand. MATIF (France's exchange) rapeseed futures were little changed, mildly underpinned by tight world supplies, FXUUHQF\PRYHPHQWVDQGFRQFHUQVDERXWFURSSURVSHFWVLQ Ukraine." The USDA's World Agricultural Supply and Demand Estimates report for November forecast U.S. oilseed production for 2015-16 at PLOOLRQWRQQHVXSPLOOLRQIURPWKHSUHYLRXVHVWLPDWHRQ increased soybean production. It put U.S. soybean production in 2015-16 at 108.5 million tonnes, up from its previous estimate of 105.81 million, and a record level, on higher yields. The report forecast global oilseed production for 2015-16 at 531 million tonnes, down slightly from the previous month. ³/RZHU VXQÀRZHUVHHG DQG FRWWRQVHHG SURGXFWLRQ DFFRXQW IRU most of the change with nearly offsetting increases projected for soybeans and rapeseed," it said. It forecast global soybean production at 321 million tonnes, up 500,000, "with the larger U.S. crop only partly offset by reductions for India, South Africa, and Uruguay." ³7KH,QGLDVR\EHDQFURSLVUHGXFHGPLOOLRQWRQQHVWRPLOlion on lower projected yields," it said. "Inconsistent rainfall during the growing season and late-season heat results in below-average yields for the third consecutive year." 100 Oct 2015 Sep 2015 Aug 2015 Jul 2015 Jun 2015 May 2015 Apr 2015 Mar 2015 Feb 2015 Jan 2015 Dec 2014 Nov 2014 0 Oct 2014 20 50 Chicago Soybean futures contract (first contract forward) No. 2 yellow, U.S. dollars per tonne. Source: USDA *OREDOUDSHVHHGSURGXFWLRQLVUDLVHGWRPLOOLRQWRQQHV³,Qcreased production projected for Canada is only partly offset by reductions for Australia, Pakistan, and Russia," it said. The verdict of Rabobank on the WASDE report was, "bearish, as U.S. yield boost surprises even the most bearish in the market." In its Oil Crops Outlook, the USDA Economic Research Service noted that "USDA anticipates higher global imports of soybeans in 2015-16 with gains for China, the European Union (E.U.), Russia, and Thailand." "The largest increase was for China, where imports were forecast PLOOLRQWRQQHVKLJKHUWRPLOOLRQDQGXSIURPPLOOLRQIRU ´LWVDLG³0RUHJOREDOWUDGHIRUVR\EHDQVLVOLNHO\WREHQH¿W exports from Brazil, Argentina, and the United States. An expansion of shipments from those countries would more than offset an expected reduction of trade from Uruguay, due to a smaller crop there." Argentine soybean shipments this fall have been robust, it said. "Brightening prospects for Argentine exports for 2015-16 led to a forecast increase by 1 million tonnes to a six-year high of 10.8 million. This month, Brazil soybean exports for 2015-16 are forecast WRQQHVKLJKHUWRPLOOLRQ´LWVDLG³,Q2FWREHUROGFURS soybean shipments from Brazil were winding down but nevertheless set a record high for the month at 2.6 million tonnes. By February 2016, much larger shipments may resume upon the harvesting of an expected record high 2015-16 crop. "Rising soybean prices in Brazil have encouraged an unusually high amount of forward sales this year. Coupled with improved port logistics, that could prompt a faster increase of new-crop shipments. At the Port of Paranagua, the October completion of an expansion of ship loading capacity will shorten the time that vessels are berthed WKHUH7KHQHZHTXLSPHQWDOVRHQKDQFHVWKHSRUW¶VHI¿FLHQF\E\DFcommodating larger vessels." Chris Lyddon is World Grain's European correspondent. He may be contacted at: We want to hear from you - Send comments and inquiries to For reprints of WG articles, e-mail December 2015 / World Grain /

Table of Contents for the Digital Edition of World Grain -- December 2015

World Grain -- December 2015
Table of Contents
From the Editor-in-chief - Milling differs from Warren Buffett
Calendar of Events
Second Oilseed Congress scheduled for Feb. 9-10
News Review - Tiger pulls financial support from Dangote Flour Mills
European Parliament rejects national GMO bans
Olam 3Q operational earnings up
Wilmar’s oilseed, grain segment earnings surge
Ardent Mills stake to stay with ConAgra Brands
Noble Agri reports loss in quarter
The Andersons reports loss on Grain Group decline
IGP Institute names interim associate director
Cargill’s new South Korean feed mill is its largest in the world
ADM opens two plants in China
GSFMO privatizes its flour mills
GrainCorp 2015 earnings down
Tiger Brands year-end earnings offset by international operations
Cargill makes executive leadership changes
Glencore agricultural production up
Grain Market Review - Oilseeds
Country Focus - Spain
Feature - Going from margin to mainstream
Feature - Record Turnout in Dubai
Feature - IAOM takes show to Indonesia
Feature - Indonesia's milling giant may expand
Indonesia in numbers
Feature - An end to the bear market?
Feature - Big turnout expected for IPPE 2016
Feature - Shaping the global feed industry
Feed Operations - Bucket elevator selection and installation tips
Supplier News
Product Showcase
World Grain Archive
Ad Index/Reader Information Form International Faxback Program

World Grain -- December 2015