World Grain - January 2015 - (Page 22)

GRAINMARKET REVIEW Oilseeds Huge U.S. harvest weighs on soybean prices Soybeans: World supply and demand 325 million tonnes World consumption 300 World production million tonnes 30 Stocks: major exporters1 25 275 20 250 15 by Chris Lyddon 225 A big U.S. harvest has pushed soybean prices down as the U.S. has been exporting at a record pace. And it's not just the U.S.; world oilseed production is projected at a record. "After the previous month's weather-inspired gains, the IGC GOI soybean sub-Index was marginally lower when compared to late October," the IGC said in its Grain Market Report at the end of November. "Losses were linked to the advancing harvest of what is expected to be a huge U.S. crop, while improved planting conditions in South America added to the negative tone. "In a month of sometimes choppy activity, U.S. soybean futures were little changed. Although sentiment was mildly underpinned by solid export demand and strength in soymeal - tied to logistical issues and tight pipeline availabilities - gains were capped by pressure from increased farmer sales as the U.S. harvest accelerated amid much improved conditions. "Underscoring prospects for an exceptional outturn, USDA's November WASDE update placed the U.S. crop slightly higher than 200 2015-16** 2014-15* 2013-14 2012-13 2011-12 2010-11 22 0 2008-09 from currency movements." In its Oil Crops Outlook, the USDA's Economic Research Service drew attention to the record pace of U.S. soybean exports. "U.S. export sales commitments of soybeans this season are at an all-time high," it said. "The outstanding sales are now falling rapidly, however, due to a robust pace of shipments." According to the USDA's World Agricultural Supply and Demand Estimates report for December, "Global oilseed production for 201415 is projected at a record 530.7 million tonnes, up 1.8 million tonnes from last month." "Foreign oilseed production accounts for most of the change on al soybean production is projected at a record 312.8 million tonnes with gains this month for Canada, Ukraine, and Paraguay. Global rapeseed production is projected at a record 71.9 million tonnes, up 1.2 million mainly on increased production for Canada, which is estimated at 15.6 million tonnes based on the latest survey results from Statistics Canada." The USDA projected global oilseed trade for 2014-15 at 135.3 150 2007-08 steady, at $425 fob (Paranagua), IGC said. "In sometimes volatile activity, ICE canola futures in Canada were fractionally lower, as weakness in soybeans outweighed support from reluctant farmer selling and good demand from exporters and domestic crushers," the IGC said. "E.U. rapeseed futures eased by around 1% on pressure from losses in neighboring markets and a 5 2006-07 America were little changed. In Brazil, where better weather allowed 175 2005-06 basis levels weakening markedly as combining advanced under good conditions, coupled with lower transportation costs and increased farmer selling, Gulf export quotations fell by $8, to $434 fob." 10 1 Argentina, Brazil, U.S. * Forecast ** Projected Source: U.S. Department of Agriculture million tonnes, up 800,000 from last month. "Soybean exports account for most of the change with higher projections for the United States, Paraguay, Ukraine, and Canada only partly offset by reductions for Argentina and Brazil," it said. U.S. producers group, the American Soybean Association, has welcomed news of normalized U.S. relations with Cuba. "Soybean growers are particularly excited about today's announcement, spefor American beans, but also in the larger scope of trade's ability to overcome even the most challenging geopolitical barriers," said ASA President Wade Cowan in December. "Trade builds bridges between nations, but it also generates real and concrete value for American farmers by expanding and strengthening our opportunities in foreign markets. Whether it's the burgeoning Cuban demand for pork, poultry and dairy, or that nation's excant market opening just off our own shores." Rabobank, in a report called "Outlook 2015 - Rebalancing After Finding the Lows," took a bearish view of soybeans. Soybean prices are expected to move downwards by Q1 2015 and then sideways to bobank said. "While we expect continued price volatility, the daily volatility will be below that of previous years." "The huge U.S. crop in 2014, combined with the expected record crops in South America in 2015, will ease the global balance sheet," it said. "We believe prices are likely to stay below the futures forward curve if the forecast record crops in South America materialize," the bank said. "However, climatic conditions between December and February will be critical and prices will be subject to short-term rallies on any weather scares." Chris Lyddon is World Grain's European editor. He may be contacted at: We want to hear from you - Send comments and inquiries to worldgrain@sosland. com. For reprints of WG articles, e-mail January 2015 / World Grain /

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

World Grain - January 2015
Table of Contents
From the Editor-in-chief - China’s land policy an issue for grain
Calendar of Events
International Agro-technological Conference
News review - EBRD makes investments in milling, grain industries
Sosland Publishing relocating company headquarters
Louis Dreyfus restarts CEO search
Nidera acquires terminal in Port of Constanta
Nutreco acquires two Brazilian feed companies
IGP Institute expands program offerings
CGB plans grain terminal
Brazilian port sets new record in grain exports
Barilla launches China market-specific pasta
Interflour acquires Indonesian flour mill
Gruma to build tortilla plant in Russia
Cargill announces additions to board, leadership team
Richardson plans new high throughput elevator
CP investing in its rail network
Kampffmeyer Food becomes GoodMills Innovation
China approves Syngenta’s GMO corn trait
Trimex finalizes purchase of Gruma wheat milling business
Grain Market Review - Oilseeds
Country Focus - Poland
Feature - U.S. flour milling industry ‘resilient'
Feature - Fast-growing industry
Feature - Ardent exec sees ‘vibrant’ industry
Feature - Building a modern milling company
GoodMills Group
Feature - Don't expect bull market in 2015
Feature - GEAPS Exchange 2015
GEAPS Product Showcase
Feature - IAOM MEA celebrates 25th anniversary
Feature - Opinions diverge on ocean rates
Feature - U.S. buying more grain from Canada
Canada-U.S. trade task group re-dedicates itself to mission
Feature - IGC cuts flour export projections
World Grain Weather report - What happened to El Nino drought?
Feature - Johannes Wick interview
Supplier News
World Grain Archive
Ad Index/Reader Information Form International Faxback Program

World Grain - January 2015