Soybeans Traded High while Argentina soybean Plant Delay

Trading of soybeans are high while soybean plant in Argentina delay because of storm. Argentina has sown 37 percent of its soybeans, from 47 percent in 2011, the Buenos Aires Cereals Exchange said Nov. 22. In Brazil, 74 percent of the soybean crop was planted, against 81 percent a year earlier, researcher Celeres said Nov. 26. The nation is set to overtake the U.S. as the largest shipper this season. U.S. exporters sold 290,000 tons of soybeans to China, the Department of Agriculture said yesterday.

The contract for January delivery gained as much as 0.4 percent to $14.5125 a bushel on the Chicago Board of Trade before trading at $14.50 at 2:43 p.m. in Singapore. Prices reached $14.5675 yesterday, the most expensive since Nov. 9.

Moderate or heavy storms are expected in Argentina in the next two days, delaying the planting of soybeans and corn and increasing the risk of wheat disease, Telvent DTN said yesterday. Futures surged to a record $17.89 in September after the worst U.S. drought in a half century parched crops. In Brazil, the second-biggest exporter, showers later this week may help maintain more favorable conditions, Telvent DTN said.

“Brazil’s got to have a pretty much perfect season and the logistics need to work well enough to get the beans out,” said Victor Thianpiriya, an analyst at Australia & New Zealand Banking Group Ltd. in Singapore. “Stocks in the U.S., which is currently the global supplier, are going to be extremely tight come March.”

Wheat for March delivery fell 0.1 percent to $8.90 a bushel, after reaching $8.955 yesterday, the most expensive since Nov. 12. Corn for March delivery was little changed at $7.635 a bushel.

WASDE: US Soybean Export 2012/2013

(azocommodity.com) - U.S. soybean exports estimate raised 210 million bushels to 1.265 billion for 2012/13. as per World Agricultural Supply and Demand Estimates(WASDE).

Soybean crush is raised 40 million bushels to 1.540 billion mostly due to increased soybean meal exports and increased soybean supplies.

Soybean ending stocks are projected at 130 million bushels, up 15 million from last month.

Global Soybean Consumption Drop in 2012-2013 as Prices Harness Demand

Global soybean consumption will drop about 3 million metric tons in 2012-2013 as record prices harness demand for the oil made from the oilseed for food and biofuel. Import demand will shift to more attractively priced palm oil next year. This will result in seizable increase in exports from Indonesia and Malaysia, reducing their stockpiles.

The rally in soybean meal prices have cooled demand among livestock producers and poultry meat production is already declining. Soybeans rose to a record $17.89 a bushel also on Sept. 4.

Higher prices of oils have affected consumption in the food sector but a larger impact is stemming from a slowdown in biodiesel sector. The growth rates in usage of oils and fats in biodiesel consumption are going to slowdown further in 2013.

Corn Stock | Soybean | Estimated

Corn commodities import estimated and soybean crop yield estimated at azocommodity.com

Corn import estimates at 1mt in 2013: corn imports of China is forecasted to drop to 1 million tons in 2013, according to China National Grain and Oils Information Center. The corn estimate is down more than 80 percent of 5.5 million tons in 2012. The fall was because of surge in US corn prices, which has cut Chinese buying interest and triggered cancellations of contracts

New global Corn crop ending stocks at 123.95 MMT: new global corn crop ending stocks of 123.95 were above the forecast of 121.0 MMT. Corn production was reduced in EU?27 and Canada, but domestic feed and exports were also reduced. Brazilian corn exports were raised 1 MMT.

US Soybean crop yield estimated at 35.3 bpa: US Soybean crop yield estimated at 35.3 bushel per acre (bpa) vs. consensus of 35.8 by USDA. Harvested acres of 74.6m were unchanged from last month and slightly above the estimated 74.4m . Production of 2.634b bu trailed the forecast of 2.657b.

Asian Soybean Demand Rise due Animal Feed and Biofuel Production

Soybean commodity - Recessionary trends in global economy have not impacted US soybean farmers on rising Asian demand for animal feed and biofuel production in USA, according to a new report from IBISWorld.

Depreciating dollar has also helped push exports from USA in recent years, according to IBISWorld Industry analyst, Agiimaa Kruchkin.

As a result, IBISWorld expects revenue to grow at an annualized rate of 6.4% in the five years to 2012. In 2012, the US Department of Agriculture (USDA) has lowered its forecast of soybean harvest yield per acre 18.0% due to an extensive drought. Nevertheless, the reduced supply will boost prices 8.0% - 20.0%. Therefore, an industry revenue increase of about 7.2% between 2011 and 2012 to $39.9 billion is expected by the end of the year.

Despite strong growth, the adoption of genetically modified (GM) seeds is reaching a saturation point, no longer a major source of yield improvement. “Additionally, the biofuels segment, which has rejuvenated the industry and continues to strengthen domestic demand, is stabilizing,” adds Kruchkin. “Consequently, growth rates are forecast to slightly weaken in the next five years.” A surge in South American inventory is responsible for the United States experiencing a steadily declining share of global exports.

The 2012 drought has reduced the global supply of soybeans, with US exports expected to fall 6.8% for the year. This situation presents a threat to the industry as Argentina and Brazil boost their global presence in the soybean export market. The Soybean Farming industry is overwhelmingly characterized by family-held individual farms. In most cases, soybean producers operate as partnerships and sole proprietors rather than corporations. Despite some farm consolidations, the industry remains fragmented. There is a long-term trend toward fewer farms across the agricultural sector, and this applies to the Soybean Farming industry as well. This trend is a result of rising costs and competition that make it difficult for smaller farms to succeed.

During the next five years, soybeans are anticipated to maintain their position as the second-largest crop in the United States behind corn. The crop's primary uses (in livestock feeds, vegetable oils and biofuels) are unlikely to change, even in the medium- to long-term. Still, as a typical agricultural product, the Soybean Farming industry is heavily exposed to volatility from external factors, such as weather conditions, market prices and government subsidies. Consequently, profit margins may vary greatly from year to year. Despite this uncertainty, continued biofuel demand will support a steady rise in soybean prices. IBISWorld forecasts industry revenue to increase through.

Soybean Prices 2012 Down per Kilogram in Indonesia

Soybean price in Indonesia following the soybean market in the United States. Soybean prices per July 27, 2012 has come down Rp.50, 00 per Kilogram. To add to the stock and maintain the stability of soybean prices, the government is currently awaiting from Gakoptindo (Know Tempe Association of Indonesia) Banking, and BH Investor will make a cooperation agreement with PT Sungai Budi soybean importer
In January soybean retail price only $ 5500 to $ 5600 per kilogram. But now the price has reached USD 8 thousand per kilogram.

The increase in soybean prices also induced the production of soybeans in the United States declined. In fact, Uncle Sam country is the world's largest producer of soybeans and soybean exports to Indonesia source. In addition, said Suswono, China began to buy soybeans on a large scale. As a result, the supply of soybeans in the world market thinning.

Soybean prices surged this makes crafters tempeh and tofu intend strike. "This is the problem when soybean prices are high, tempeh and tofu producers are going to scream. Because we still import 60 percent soy and 40 percent local," said Suswono.

Ministry of Agriculture in the work plan, to achieve self-sufficiency in soybeans in 2014, then production should reach 2.7 million tons. However, efforts to self-sufficiency is still constrained land issues. "Self soybeans require minimal additional 500 thousand hectares of land," he said.

Currently it is seeking to add land to be inventoried by the National Land Agency. Ministry of Agriculture and BPN agreed to meretribusi land for agricultural needs.

In the next month, it will review the BPN with which land could be distributed to farmers. However, if it was never realized, it will be applied nucleus-plasma.

Suswono also had other plans. To boost the production of soybeans, it will be done in intercropping systems. Potential planting intercropping system can be equivalent to 200 thousand hectares of land expansion. The dry season is considered appropriate to start planting soybeans.

In order not to rely on the addition of land, the Ministry of Agriculture will seek an increase in productivity of 1.3 tons per hectare to 1.54 tons per hectare. Then the seed aid, increased use of fertilizer, and control of plant pests. "In two years still allows for self-sufficiency," he said.

USDA Estimate 35.1m tones Domestic Soybean Shipment 2011-12

The US Department of Agriculture's upgrade on Tuesday to 35.1m tonnes in its estimate for domestic soybean shipments in 2011-12 implies a rapid pick-up in the second half of the marketing year, the March-to-August period, Australia & New Zealand Bank said.

The data mean that "exports are likely to test historical highs" for the rest of the season, and return to showing year on year increases following a 7.5% decline over recent months, when US soybeans were competing with heavy exports from Brazil, which reaped a bumper 2011 crop.

US soybean exports are to test seasonal records in the next few months thanks to the shortfall in South American production, which will see Brazil's soaring shipments fall into decline.

Indeed, they will reach a near-record 10.7m tonnes in the period, given that the US has shipped 24.4m tonnes from September to February, the first half of the marketing year.

Global Food Prices Rose, Soybean Futures Surge in May 2012

Global food prices rose to an all-time high last year, triggering unrest in northern Africa and the Middle East. The United Nations said this month that grain imports by the world’s poorest countries will climb to a record in the 12 months ending June 30. The U.S. was the world’s biggest exporter of corn, soybeans and wheat last year.

Soybean futures for May delivery surged 3.5 percent to close at $14.03 a bushel on the CBOT, the biggest gain since Oct. 11. Earlier, the price touched $14.16, the highest since Sept. 12.

The price jumped 16 percent in the first quarter after dry weather reduced crops in South America. Brazil is forecast by the USDA to be the largest exporter this year, topping the U.S. for the first time.

Farmers may sow 73.902 million acres in soybeans, down 1.4 percent from 74.976 million last year and less than the 75.429 million expected by analysts. Seeding of wheat, including spring and winter varieties, may total 55.908 million acres, up 2.8 percent from 54.409 million a year earlier and lower than analyst expectations of 57.551 million.

“There is no question we will see higher food prices this year,” Steve Nicholson, a commodity procurement specialist at International Food Production Corp. in Fenton, Missouri, said in a telephone interview. “You have to see prices go up to stimulate global production and ration declining supplies.”

The soybean-seeding forecast was about 1.5 million acres below the average estimate of analysts and almost 1.1 million less than a year earlier. Farmers told the USDA that they plan to cut the planted area in seven of the top-eight producing states.

The USDA said in February that rising acreage may push U.S. corn production to a record, capping food inflation. Global food costs rose to an all-time high in February 2011, spurring unrest in northern Africa and the Middle East. Corn futures touched a six-month high at $6.7575 a bushel on March 19 on the Chicago Board of Trade. In June, the grain climbed to a record $7.9975 as U.S. stockpiles slid to a 16-year low.

At current prices, farmers in southern Minnesota can make about $130 per acre of corn, compared with about $60 per acre of soybeans, because corn crops yield more, said Tom Neher, a vice president at lender AgStar Financial. Soybean futures have surged 20 percent since the end of November, as adverse weather threatened South American crops. Four months ago, before the rally, farmers would have lost $60 per acre on the oilseed, Neher said.

“Soybeans have worked really hard to buy back more acres,” said Neher, who helps manage AgStar’s grain portfolio, worth $2.1 billion in loans and leases to farmers. “Soybeans are more in favor now than they were earlier, but there’s still a lot more profit to be made in corn.”

Farmers from Minnesota to Washington may plant 11.976 million acres in spring wheat, down from 12.394 million last year, the USDA said. Analysts expected 13.35 million acres of the grain, used to make bread and pizza dough. Durum wheat, used in pasta, may be planted on 2.223 million acres, up from 1.369 million last year, when floods swamped fields.

Soybean Prices Rally, Futures Delivery May 2012 Advanced

Soybean extended rallies to the highest prices since September on speculation that China may boost purchases from the U.S., the biggest producer of soybean crops. Soybean imports may rise more than 20 percent in the first half of 2012, Grain.gov.cn said March 12.

Soybeans may rally next week as unusually warm, dry weather and drought conditions in parts of the northwestern Midwest may threaten this year’s crops and encourage farmers to withhold supplies left from last year’s harvest, Tim Hannagan, a grain analyst for PFT Best Inc. in Chicago, said in a telephone interview.

Soybean futures for May delivery advanced 0.4 percent to $13.74 a bushel in Chicago, after touching $13.775, the highest since Sept. 15. The oilseed rose 2.7 percent for the week, the fifth straight and the longest weekly rally since November 2010.

“The export-pipeline supply of soybeans will shrink the next few weeks because farmers will fear the weather will prevent building stocks to more comfortable levels,” Hannagan said. “March is a month when investors pour money into the grain markets before the start of the growing season.”

Soybean futures for May delivery gained 0.2 percent to $13.7175 a bushel in Chicago, after touching $13.775, the highest since Sept. 15.

Soybean Futures Prices Rally, May 2012 Delivery Rose per Bushel

CBOT soy futures rally, extending recent gains on strong exports and worries about Brazil's crop. The USDA announced a huge export sale to China, which although already known given a Thursday signing ceremony, nonetheless added to optimism that the U.S. would continue to see increased business as South America production falters in hot, dry weather. The crop in Brazil is a particular concern. Traders say recent gains in soybeans versus corn could result in more soy acres than expected this spring. CBOT March soybeans end up 9 1/4c to $12.67 1/2 a bushel, up 3.1% for the week. CBOT March Soybean Oil up 0.35c to 53.40 cents/lb, while March soybean meal ends up $1.70 to $332.50 per short.

Soybeans for May-delivery rose 0.9 percent to $12.765 a bushel. The most-active contract is set for a 3.9 percent gain this week, the biggest since the five days ended Oct. 14.

Argentina’s soybean harvest may reach 43.5 million tons to 45 million tons, the Agriculture Ministry said yesterday. That compares with a 48 million-ton forecast by the U.S. Department of Agriculture on Feb. 9.

“Recent developments in the soybean market have so far buttressed” the bullish view on the oilseed in 2012



Private exporters reported to USDA export sales of 116,000 metric tons (MT) of soybeans to China during the 2011-12 marketing year. The marketing year for soybeans began Sept. 1.

USDA issues both daily and weekly export sales reports to the public. Exporters are required to report to USDA any export sales activity of 100,000 metric tons or more of one commodity, except 20,000 tons for soybean oil, made in one day to one destination, by 3 p.m. Eastern time on the next business day following the sale. Export sales of less than these quantities must be reported to USDA on a weekly basis.

Soybean Market 2012 Compare February and January

Soybean market 2012 came alive in early February as factors began to fall into place for U.S. soybean exports. On Feb. 3, the March 2012 contract closed at $12.32, May at $12.40, July at $12.50, August at $12.49, September at $12.42, November at $12.35 and January 2013 at $12.43. "All eyes are on South America, and trying to look at the size of the crop," said Al Kluis, Kluis Commodities.

Late in 2011, the USDA had projected the South American soybean crop would run 100-200 million bushels larger than last year's crop. Ahead of the Feb. 9 World Agricultural Supply and Demand Estimate, traders expected the USDA would lower the soybean crop in Brazil, Argentina and Paraguay by 200-250 million bushels below the final 2011 crop size.

"This has had a really dramatic effect on what our export prospects are for the U.S. and also on our future global supply reports," Kluis said.

U.S. exports and the soybean carryover were not stellar this January. The 2010 carryover was forecast at 140 million bushels in early February 2011. The 2011 carryover was forecast at 275 million bushels in early February 2012.

In addition, U.S. soybean export sales for the final week of January were 308,400 metric tons for the current marketing year (11.3 million bushels) and 60,000 metric tons for next year (2.2 million bushels). In general, 20 million bushels per week is considered bullish for soybean export sales.

But traders were noting the smaller than expected South American soybean crop.

"When South America has production problems, their pain is our gain," Kluis said. "The soybean market has put on 80 cents a bushel just because of the recent production problems in South America."

Compared with prices back on Jan. 20, 2012, the March contract was 47 cents higher, May was 46 cents higher, July was 47 cents higher, August was 48 cents higher, September was 50 cents higher and November was 51 cents higher.

Kluis said that prices were not at a level where rationing will occur.

"Soybeans at $12 are a fair value for both the farmer and the end user, but growing $12 soybeans at today's cost is not a real ‘get rich proposition'," he said. "It's really helpful the U.S. dollar is as low as it is. The international buyers still look at our prices as being competitive."

At an elevator in western Minnesota followed in this column, cash soybeans on Feb. 3, 2012 were $11.77 with a basis of 56 cents under per bushel. Compared with a price on Jan. 20 of $11.35, the price was 42 cents higher and the basis had narrowed by 2 cents.

Soybean Futures Prices 2012 Rose on CBOT as US Harvest decline

Soybean futures prices for January 2012 delivery rose 0.7 percent to close at $11.755 a bushel at 1:15 p.m. on the Chicago Board of Trade. Yesterday, the price touched $11.67, the lowest for a most-active contract since Oct. 10. The oilseed, down 3.7 percent this week, has dropped 16 percent this year.

Soybeans rose on speculation that the U.S. harvest declined more than the government estimated after dry weather during the summer lowered yields. Corn fell as producers of livestock feed shifted to cheaper wheat.

The U.S. Department of Agriculture cut its forecast on this year?s soybean crop for a second straight month on Nov. 9, saying production will fall 8.5 percent to 82.9 million metric tons. Some fields from Minnesota to Tennessee were the driest ever in August, data from National Climatic Center show.

?The soybean crop may get smaller,? Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview. ?There is some demand surfacing after the recent drop in prices.? Last year, the U.S. was the world?s leading exporter of soybeans and corn.

Futures Soybean Prices open 6-8 cent per Bushel

Soybean futures prices may open 6 cents to 8 cents a bushel lower in Chicago as improving prospects for South American crops ease demand for U.S. exports, which have dropped 33 percent since Sept. 1, compared with a year earlier, Roose said. Soybean-oil futures are expected to open 0.25 cent to 0.3 cent lower, and soybean-meal futures may open down $2 to $3 lower for 2,000 pounds.

Soybeans for January delivery retreated 0.5 percent to $12.3775 a bushel. The oilseed has climbed 1.4 percent this week.






320.600
-2.900
-0.90%
08:14




51.830
-0.280
-0.54%
08:14

SOYBEAN MEAL FUTURE (USD/T.)

SOYBEAN OIL FUTURE (USd/lb.)

Soybean Taxes and Tariffs regulation

The soybean taxes and tarrifs, policy regulation can often work wonders and going by China?s efficient handling of the same in soy sector can be a lesson for many; especially Brazil.

China is the world?s biggest importer and consumer of soybeans and accounts for 60% of world?s total imports. Its appetite for soybeans is so huge that even crushers in US--the country is the top producer of soybean-- are unable to source their requirements.

?China?s surge in soybean imports mean that US processors must pay higher prices for soybeans relative to the domestic price for soy meal, which has contributed to processor margin contraction.? says a Rabobank report.

Despite this robust demand increase, China?s domestic production has remained relatively stable near 15 million tonnes, as soybeans are not considered to be a strategic crop, unlike corn, Wheat and rice.

Keen to support its domestic crushing industry, China introduced a differential import tax structure in 1998 to encourage imports of whole soybeans rather than Soymeal and soy oil.

Look at their tax regime for soy complex:

--3 percent import tariff plus 13 percent value-added tax on soybeans

--5 percent import tariff plus 13 percent value-added tax on soymeal

--9 percent import tariff plus 13 percent value-added tax on soy oil (same as on palm oil)

This tax structure facilitates imports of soybeans while discourage soymeal and soyoil imports. The crushers are thus benefitted, though overcapacity is a scourge.

In 2010, Rabobank estimates that China had a total soybean crushing capacity of approximately 100 million tonnes and crushed 55.8 million tonnes. To address its overcapacity problem, China?s National Development and Reform Commission published a directive titled ?Guideline of Pushing a Healthy Development of Soybean Processing Sector? in September 2008.

The Guideline suggested decreasing capacity to 75 million tonnes by 2010 and to 65 million tonnes by 2012. The Guideline also stipulates that a single company may not expand once it accounts for 15 percent of national production volume.

It should be understood that approval for expansion will tend to favour state-owned crushers under this policy. To date, the Guideline has been unsuccessful at shrinking capacity. However, it has prevented foreign companies from green field or merger and acquisition (M&A) expansion, instead forcing them into lease agreements with local crushers.

Needless to say, industries thrive in this ambience.

The case of Brazil

Brazil?s export taxes on soybeans and soybean products were abolished with the introduction of the Kandir Law in 1996. Prior to the Kandir Law, Brazil taxed soybean exports at 13 percent and Soymeal and soy oil exports at 10 percent.

Domestic crushing was incentivised and the industry expanded crushing capacity. After differential export taxes were removed in 1996, Brazil?s soymeal and soy oil exports declined sharply as a percentage of the world export market while its soybean exports showed a steady increase as a percentage of the world export market. The decline in soymeal exports also reflects growing domestic meal demand. The legacy of Brazil?s differential export tax was excess crushing capacity and compressed margins, but the industry has now grown beyond this, especially with continued growth in animal protein production and new incentives for biodiesel.

What remains of Brazil?s soybean tax system is the Tax on Movement of Goods and Services, or ICMS.

ICMS is administered by each individual state in Brazil and is one of the country?s primary tools for generating state tax revenues. As such, the tax has many entrenched supporters among state governments, even though it is complicated and does not serve the strategic interests of the industry or the country as a whole. It works as follows:

--Soybeans are taxed at 12 percent each time they cross a state border

--Soymeal and soy oil are not taxed for crossing state borders

--Exports are not taxed

In principle, Brazil?s intention is to tax soybeans at a total rate of 12 percent. The complication arises because there is little integration between taxing authorities in the different states. As a result, the 12 percent state tax is cumulative unless a transporter is sophisticated enough to use legal means to collect overpayment credits. This can be an expensive and time-consuming exercise.

Grain Future Prices Close Mix on CBOT

Commodities Trading - Grain futures prices closed mixed on the Chicago Board of Trade Wednesday as concerns of a heat wave dictated market sentiment.

Corn was off 8 1/2 to off 10, soybeans were off 1 to up 2 1/2, wheat was up 3 1/2 to up 12 3/4 and oats were unchanged.

Corn prices opened higher, but buying faded as the sharp rally that began in previous sessions appears to have hit its peak. Wheat trading also balanced concerns over possible crop damage from a prolonged heat wave with concerns that the rally earlier in the week had run its course. Soybeans futures were off slightly as the weekend weather forecasts included some cooling down from mid-week highs.

The prices:

Corn: Sep 6.88 off 10, Dec 6.77 3/4 off 9 1/2, Mar 6.89 3/4 off 9 1/2, May 6.96 1/2 off 8 1/2.

Soybeans: Aug 13.78 1/4 off 1, Sep 13.79 up 2, Nov 13.84 up 2, Jan 13.93 1/4 up 2 1/2.

Wheat: Sep 6.97 up 3 1/2, Dec 7.35 1/4 up 8 1/2, Mar 7.68 3/4 up 11, May 7.87 1/2, up 12 3/4.

Oats: Sep 3.53 1/2, Dec 3.65, Mar 3.75, May 3.81 1/2 -- all unchanged.

Soybean Prices Future 56 USD Trading Range

Soybean prices continue to move erratically in a very wide range. Just in the past week, both May 2011 soybean futures had a $.56 trading range. As the markets make the transition from old crop to new crop dominance, a lot of factors are influencing price expectations.

Soybeans, the Census Bureau soybean crush report released on April 28 revealed that the March 2011 crush was about 10 percent smaller than that of March 2010. Through the first 7 months of the 2010-11 marketing year, the crush was 7.4 percent smaller than the crush during the same period last year. For the year, the USDA has projected a decline of 5.8 percent. Last year, the crush was unusually large in the first half of the year and declined rapidly from April through August. The seasonal decline may be less pronounced this year. Still, the crush for the year may fall marginally short of the current USDA projection of 1.65 billion bushels.

The pace of soybean exports and export sales has declined sharply and export inspections during the weeks ended April 21 and 28 fell below the weekly rate needed to meet the USDA projection of 1.58 billion bushels for the year. Reports of on-going measures in China to cool economic expansion, along with large South American supplies, suggest a continued slow rate of exports.

Expectations about the 2011 U.S. soybean crop have centered on some planting delays for corn and the implication for soybean acreage. With corn planting likely to continue through May, if needed, there is no strong indication yet that planted acreage of soybeans will deviate substantially from March intentions.

USDA Concern Supply, Future Soybean and Corn Soar

Corn futures soared the daily 30-cent limit and soybean prices also rallied sharply after government data exacerbated concern over dwindling U.S. grain stockpiles in Chicago.

The nation?s corn and soybean supplies at the beginning of March fell to unexpectedly low levels, based on a U.S. Department of Agriculture report released earlier March 31. In a separate report, the USDA said it expects American farmers to reduce soybean plantings this spring, though corn acreage will rise to the second-highest total since the end of World War II.

With the spring planting season just beginning and harvest six months away, today?s reports only fueled anxiety over tight corn and soybean supplies, traders and analysts said. Demand from ethanol makers, livestock feeders and exporters remains strong, leaving little margin for error during the upcoming growing season.

Supplies are ?razor-thin,? said Matthew Connelly, a corn options broker on the CME Group trading floor in Chicago. ?If we go from a wet, cool spring to a hot, dry summer, that?s not good. That will get things going? in the grain markets.

If Midwest weather turns unfavorable, ?we could be talking about $10 corn and $20 soybeans,? Connelly said.

In trading March 31, corn futures contracts for delivery from May through July 2012 all rose 30 cents, the maximum daily move allowed by CME. May futures settled at $6.93 ? a bushel and December ended at $6.25 ?. Corn futures reached a 32-month high of $7.35 on March 4.

May soybean futures rose 38 ? cents to $14.10 ? a bushel, while November futures rose 31 ? cents to $13.95.

Farmers favoring corn over soybeans

Corn prices were the top-performer among major U.S. grains last year - rising 52 percent, based on CME futures - and the market continued to soar in 2011. High prices have boosted expected returns from planting corn compared with other crops, encouraging more acreage, the USDA said in its annual Prospective Plantings report March 31.

Farmers will plant an estimated 92.18 million acres to corn, up 4.5 percent from 88.19 million in 2010, the USDA said. The projected acreage for 2011 would trail only 2007 plantings of 93.5 million acres as the highest total since 1944.

Analysts on average expected corn plantings at about 91.8 million acres, based on a Dow Jones Newswires survey.

Much of the increase in corn will come at the expense of soybeans. Iowa, Kansas, Mississippi, Nebraska and Ohio are among states where farmers are expected to plant more ground to corn and less to soybeans. In North and South Dakota, corn acres are projected to surge 22 percent and 19 percent, respectively, according to the USDA.

Nationwide soybean plantings are estimated at 76.61 million acres, down 1 percent from 77.4 million last year but still the third-highest acreage on record, according to the USDA. Based on the Dow Jones survey, soybean plantings were estimated at 76.9 million acres.

While big corn acreage could lead to a record crop this fall, shorter-term supply concerns remain a primary focus for traders and analysts. By the end of the 2010-11 marketing year Aug. 31, U.S. corn stocks are expected to reach the lowest level in 15 years.

Jack Scoville, an analyst with Price Futures Group in Chicago, said lower-than-expected stocks figures for corn and soybeans will keep markets ?more attuned to weather developments? this spring and summer.

?We?re going to need really good weather, even with all these acres being planted to corn,? Scoville said during a March 31 press briefing at CME following the release of the USDA reports.

Recent corn purchases by exporters as well as livestock feeders has stayed firm even at high prices, Scoville said. Livestock buyers ?weren?t too thrilled with $7 (corn), but they paid it,? he said. ?They seem to be able to make those numbers work.?

In its Quarterly Stocks report, the USDA said U.S. corn supplies as of March 1 totaled 6.52 billion bushels, down 15 percent from the same date a year earlier. Soybean stocks totaled 1.25 billion bushels, down 1.6 percent.

March 1 corn and soybean supplies were about 180 million bushels and 46 million bushels, respectively, below analysts? expectations.

The USDA reports signal higher costs for livestock feeders, with many analysts expecting corn futures to climb back above $7 a bushel in coming weeks after tumbling near $6 earlier this month. With expensive feed discouraging herd expansion, cattle and hog prices may rise further.

?Look for livestock markets to advance on prospects for tighter and higher feed supplies, prompting lower weights and more cautious expansion attitude by livestock growers,? Richard Feltes, an analyst with R.J. O?Brien & Associates, said in a March 31 report. ?Today?s report sets stage for highly sensitive, weather-driven markets this summer.?

In late-morning trading, April live cattle futures traded on CME fell 0.175 cent to $1.20375 a pound, after touching a record $1.2165. April lean hog futures fell 0.1 cent to 93.45 cents a pound.

Lower soybean acreage may also push soybean meal prices higher, further raising feed costs for livestock producers.

But some analysts noted that soybean acres could still increase above the USDA?s projection. If a wet spring delays planting, farmers may shift more ground to soybeans, which have a shorter growing season than corn.

The USDA?s soybean plantings estimate, at 76.61 million acres, may be revised higher ?if the weather is indeed cold-wet through the month of April,? Mike Zuzolo, president of Global Commodity Analytics & Consulting, said in a March 31 report. He also sees the projected corn plantings ?as the biggest number we?ll get this spring if the weather doesn?t cooperate.

Delivery Corn Prices Gains while Soybeans Advanced on Speculation

Delivery corn prices for March gained as much as 0.5 percent to $6.625 a bushel in Chicago before trading at $6.615 at 11:54 a.m. Singapore time. Yesterday, it rose as high as $6.6275, the highest price for the most-active contract since July 17, 2008. March-delivery soybeans gained 0.9 percent to $14.255 a bushel.

Corn gained to near a 30-month high and soybeans advanced on speculation that imports by China may expand as the yuan appreciates against the dollar, and on optimism its trade relations with the U.S. will improve.

The yuan rose to a 17-year high against the dollar yesterday before Chinese President Hu Jintao?s meeting with President Barack Obama. Hu arrived in Washington yesterday for his first state visit to the U.S.

?The Hu Jintao visit sparked speculation of a revival of China?s corn imports from the U.S.,? Chung Yang Ker, an analyst at Phillip Futures Pte., said by phone from Singapore. ?The U.S. may also play a bigger role? in meeting China?s soybean import needs, he said.

The visit may improve trade relations that have been strained recently, Ker said.

China, the world?s biggest grains user, began in December an anti-dumping investigation into U.S. shipments of dried distillers? grains, a by-product of corn-based ethanol that?s used in animal feed. Before the investigation, the U.S. filed a complaint at the World Trade Organization against China over support for its wind-energy manufacturers.

U.S. Export Sales

Wheat futures rose for a second day as import demand expands, while adverse weather continues to threaten crops in some of the world?s biggest producers.

March-delivery wheat gained as much as 1.2 percent to $8.03 a bushel in Chicago before trading at $8.0075.

U.S. exporters sold 145,000 metric tons of hard-red winter wheat to Turkey for delivery in the 2010-2011 marketing year that began June 1, the U.S. Department of Agriculture said yesterday. As of Jan. 13, U.S. authorities have inspected 700.7 million bushels of the grain for export, up 36 percent from a year ago, the U.S. Department of Agriculture said yesterday.

Conditions in Kansas, the largest winter-wheat state, ranged from abnormally dry to severe drought, data from the University of Nebraska at Lincoln show. In China, about 4 million hectares of crops have had up to 90 percent less rain than last year, the Xinhua News Agency said. Floods in Australia have delayed shipments and reduced crop quality.

?That sparked concerns that the drought is going to hit China?s crops,? Ker said. ?That may boost imports.?

Ukraine?s wheat harvest fell 19 percent to 16.8 million metric tons in 2010, the State Statistics Office said yesterday. The USDA forecast on Jan. 12 that Ukraine?s output will decline to 17.2 million tons this season, from 20.9 million tons in the previous season.

?Whatever happens in the Black Sea region is a supportive tone to the wheat market,? Ker said. ?These are news that are going to push wheat prices beyond $8 a bushel.?

Commodities Soybean and Corn Fell, Future Price Drop

Soybeans fell decline in a month and corn fell to a three-week low on speculation that the rain will increase the plant in Brazil and Argentina, the world's largest exporter after the United States.




Soybean futures for March delivery fell 13 cents, or 0.9 percent, to close at $ 13.65 a bushel at 1:15 at the Chicago Board of Trade. Prices fell 2.7 percent for the week. The most active contract jumped 13 percent in December, capping gains 34 percent in 2010 on increased demand for animal feed and cooking oil made from oil seeds.




Corn futures for March delivery fell 7 cents, or 1.2 percent, to $ 5.95 per bushel in Chicago, the lowest for the most-active contract since Dec. 17. commodities lost 5.4 percent for the week, the first weekly decline since mid-November, as export demand slows. Price reaches 29-month high at $ 6.34 on Jan. 3. 2011.




Soybean prices also fell on concern that demand for U.S. corn and soybeans from China, the biggest global consumer of grain and vegetable oil, may slip, said Richard Feltes, vice president of research at RJ O'Brien & Associates in Chicago.




Corn is the biggest U.S. crop, valued at $ 48600000000 in 2009, followed by soybeans at 31.8 billion U.S. dollars, government data showed. Corn-based feed ingredients, was banished to China at a price below the market could disrupt trade. He also said the probe could result in import duties of 100 percent.




In the first 10 months of 2010, China imported 10 percent to 12 percent of U.S. production, industry-funded council said. U.S. exporters reported sales of 180,000 metric tons of soybeans to China for delivery before 31 August, according to U.S. Department of Agriculture. Soybeans may be "optional origin," said USDA, which means they do not have to be planted in the U.S.




Some of the driest parts of Argentina may get rain during the next 14 days after the storm this week to increase humidity in dry land in the south and the west developed, QT Weather in Chicago said today in a report. In Brazil, rainfall above the normal average of the next two weeks will maintain favorable growing conditions, fortune-teller.




Argentina soybean production may fall 17 percent to as low as 43 million metric tons in the 2010-2011 harvest as a result of drought, Buenos Aires-based research firm Economia y Regiones last month.

International Soybean Prices and Production Commodity

Soybean production for 2010-2011 is forecast at 3.408 billion bushels, down 75 million based on both lower harvested area and yield. Soybean ending stocks are projected at 265 million bushels, down 85 million from last month, as per last wasde report. U.S. soybean exports are increased 35 million bushels to 1.520 billion reflecting strong export sales and reduced export prospects for Argentina resulting from lower beginning stocks. All this factors led to the bull run which is yet to show the correction.

Soybean Meal International Prices

U.S. - 48% - US$ 399-404 per ton fob

U.S. - 44% - US$ 388-393 per ton fob

India US$ 418-422 per ton fob/fas

Robust oil meal demand from local traders as well as exporters supported the rise in the prices. The delay in harvesting due to rains in producing regions and international factors pushed the beans prices up in Indian market. U.S. December soybean meal futures closed at US$ 330.90 per short ton up by $ 2.70 from last week's closing of $ 328.20.

Brazil Soybean Meal International Prices US$ 390-400 per ton fob

CONAB estimated Brazil?s 2010/11 soybean crop was estimated between 67.6 million and 68.9 million tonnes, the government?s crop supply agency Conab said last week, against the record 68.7 million tonnes harvested last season. CONAB said planted area for soybeans would grow by between 1.3 and 3.1 percent this year to 23.8 million to 24.2 million hectares (58.7 to 59.8 million.

Brazil?s soybean exports forecast for 2010-11 as per usda are up 1.0 million to a record 31.4 million on a larger crop and strong foreign demand.

China

China?s imports of soybean oil have dropped in 2009/10 as trade disputes with Argentina. In an effort to offset that shortfall of the most commonly consumed oil, processors have increased their imports of soybeans and accelerated crushing activities to boost oil production, and have also purchased large volumes of soy oil from the United States. This Chinese demand along with last wasde report are the main factors for bean's bull run.

While expanding soybean crush helps to partially moderate the oil import shortfall, it also can lead to strengthening exports of soybean meal. China is expected to export 1.2 million tonnes of meal in 2010-11.s

As per one news, China restarted cooking oil imports from Argentina earlier this month and have bought at least 70000 tons of Argentine soybean oil.

Argentina US$ 385-387 per ton fob

Soybean crop is being planted at a quicker pace than a year earlier as farmers take advantage of rains in September and October to sow before the Southern Hemisphere summer begins.

Argentina?s soybean exports are cut 1.5 million tons to 12.0 million in response to intense competition from other exporting countries, as per last usda oilseeds report.