Wed 01 May 2013 07:37:45 CT
July soybeans are trading 22 cents lower at 7:10 am cst. There were no May deliveries overnight. Chinese equity markets were closed for holiday today, but those markets might have to play some catch up on Thursday, to private readings on Chinese manufacturing overnight, as they showed some weakening activity from the prior month. European equity markets were closed but the stock market in the UK was higher off gains in UK manufacturing PMI readings for the month of April. The markets will look ahead to the FOMC statement later today, but first the US will see some private jobs figures, ISM Manufacturing and Construction Spending data. Expectations call for arise in Construction Spending and for a decline in the ISM Manufacturing report.
Interior basis levels remain extremely firm in the US despite the higher flat price levels seen earlier this week with processors paying anywhere from 110-115 over the July contract. Physical traders noted that fresh farmer sales were extremely light as many farmers prep equipment for planting corn and are more concerned with the delayed planting prospects than the current cash price of soybeans with some quotes coming in over $15. Processors remain the best bid in the market while CIF bids tried to pull back a bit yesterday but no substantial moves were indicated by commercial traders. Old vs. new crop spreads have a weaker tone this morning, led by the May/July and the July/November which is down almost 14 cents from the high yesterday. Traders also indicated that the FOB "paper" in the Port of Paranagua, Brazil collapsed yesterday with bids indicated at 24 under the July, down almost 30 cents from last week. July FOB offers out of the Gulf of Mexico are now indicated at a $47 per tonne premium to Brazil. The spread suggests that additional purchases, if made by China, will likely come out of Brazil. The spread also suggests that US imports may occur sooner rather than later.
A well-followed oilseed analyst reported that they expect South American soybean exports to reach record levels in May as the bottleneck of vessels at the port slowly deteriorates and logistics run smoother. The analyst estimates that up to 9.3 million tonnes will be shipped out of South America in April, which would be a record, and up from 4.3 million tonnes shipped in March. The analyst went on to say that 10 million tonnes may be shipped in the month of May. Other reports show that Brazil has loaded 7.4 million tonnes in April, a new record high. Combined meal shipments out of Argentina and Brazil were at 3.4 million tonnes in April, down slightly from record levels in this time period.
Pressure in the November contract continues to come from thoughts that the next planting report will show 500,000-1 million more soybean acres planted. The well-advertised storm system entered western and central NE overnight bringing a wintry mix plus cooler temperatures. The Omaha area will see low temperatures near 30 degrees tomorrow but the winter-like conditions will shut off by Sunday with 70 degree temps expected by next Monday. A similar forecast is expected for IA with precipitation totals backing off a bit but still near 4 inches for the central portion of the state. A more favorable 6-10 day forecast was suggested late yesterday by NOAA with dry conditions in the northern plains, above average rainfall in the eastern Corn Belt and normal conditions for the Midwest. An extended period of warmer and drier conditions will promote an increased pace of soybean planting.
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