InsideFutures.com Commentary

Chicago Board of Trade Soybean Products

Tuesday, October 20, 2009

Monday, October 15, 2007

Wasde report: Soybean Oct 12, 2007

Friday Soybean ended lower amid lack of a bullish inspiring case in the U.S. Department of Agriculture's crop reports. The USDA reported smaller 2007 acreage and unchanged ending stock projections. The USDA forecasts 2007-08 soybean production at 2.598 billion bushels versus the average of trade estimates at 2.648 billion. Below an abstract of the Wasde report:

U.S. oilseed ending stocks for 2007/08 are nearly unchanged from last month as increased supplies are offset by higher exports and crush. Oilseed supplies are forecast higher this month mainly due to production increases for sunflowerseed, peanuts, and cottonseed. Soybean production is forecast down 21 million bushels to 2.598 billion due to this month's acreage reductions. Planted

and harvested area are both lowered 0.4 million acres. Total soybean supply is forecast almost unchanged as reduced crop production is nearly offset by increased beginning stocks. Soybean ending stocks are projected at 215 million bushels, unchanged from last month. Global oilseed production for 2007/08 is projected at 392 million tons, up 1.1 million tons from last month. Foreign oilseed production accounts for most of the change. Soybean production for Brazil is raised 1 million tons to 62 million based on increased harvested area as producers respond to higher soybean prices. China soybean production is reduced 0.6 million tons to 14.6 million due to

dry conditions in the principal growing region. This would be the smallest soybean crop in 8 years. Soybean production is also raised for India. Global oilseed stocks for 2007/08 are raised slightly this month as increased soybean stocks for Brazil, resulting from increased production, are mostly offset by lower stocks in Argentina.

Wednesday, October 10, 2007

Soybean Market Update Oct-10

The acreage war is back! CBOT soybean futures rose Wednesday on
fears the government will cut its estimate for U.S. harvested acreage, all eyes on Frida's WASDE report. December soymeal finished $5.80 higher at $274.90 per short ton.

Monday, October 8, 2007

Soy Meal Alert

To the Value Area Trading Newsletter Subscribers: the expected correction from overbought levels in Dec Soymeal has hit its target. A nice profit can be cashed in or, alternatively a protective buy stop can be placed above current levels to lock in the short trade profits.

Tuesday, October 2, 2007

Crop progress

Latest Soybean USDA crop progress as of Sept 30, 2007:

Percent harvested area at 29% (5 year average 24%, last year 18%): harvesting is proceding well, this should provide some supply downside pressure on soy complex prices for today.
A slight dollar rebound this morning should also add some selling pressure in the opening.

Monday, October 1, 2007

CRP news

Last friday higher than expected stocks data reduced fear for excessive tight supply.
During the week-end USDA acting secretary Chuck conner stated:"...The U.S. Department of Agriculture will not offer penalty-free early releases from Conservation Reserve Program contracts at this time. While this year's global wheat market remains very tight, corn production is expected to be record-high, and today's grain stocks report indicated higher than expected stocks for corn and soybeans at the start of the 2007/08 crop year. In addition, more than 2 million CRP acres expire under existing contracts this weekend, on September 30, 2007."
"Wheat, soybean, and corn markets are providing very strong incentives to plant more acreage this fall and next spring. Throughout this year, the market focused on attracting corn acres, and to a lesser extent, wheat acres."
"Overall, I expect that market signals will continue to provide adequate acres, recognizing that strong competition among crops is likely."
"I will continue to closely monitor the acreage response and market conditions. I will not hesitate in the future to make adjustments to USDA programs if needed to achieve balance in the agricultural sector."

Acreage War and Soybean

Which US Crop will get the acreage in 2008 and at whose expenses? This is a fundamental question that will be scrutinised during the next 6 months and its answer will likely be the most important factor to evaluate the fundamental strength of soybean, cotton, corn and wheat.
Soybean and cotton were the loosers of the battle in 2006/2007 while the undisputed winner was corn whose acreage size jumped driven by biofuel demand. Over the last few months cotton and soybean prices have been rising to adjust to the reduced acreage (and hence reduced potential supply). Now, during the harvesting season it is worth asking what is going to happen next year. With soybean prices at historically high level farmers may decide to plant more, what needs to be monitored during the next few months is the relative pricing of Soybean, Corn, Wheat and Cotton to figure who is going to get more next year. I will try to monitor relative prices and report periodically about it in this blog.
As of today, at current prices, Soybeans and Wheat are expected to gain acreage in 2008, but a lot can change from now to the planting season.


Below some charts from the USDA:






Barchart Market Report