Argentina Soybean Crush Slows on Restrained Farmer Selling

With growing financial uncertainty, Argentine producers continue to be reserved sellers of soybeans. After an initial surge in post-harvest sales, producers have mostly exited the market. Producers have limited sales only to amounts necessary to meet expenses, choosing instead to hold crop as the best hedge against inflation. This has reduced the availability of soybeans for processing, contributing to a recent slow-down in crush and a reduction in USDA’s 2013/14 Argentine crush estimate.

Despite the recent slow-down, total crush volume in 2013/14 is expected to exceed last year’s level because of the larger crop and post-harvest surge in sales as producers needed to meet expenses. With soybean prices continuing to slide into 2014/15, producers will need to sell an even larger volume of soybeans for cash flow. This should increase the availability of soybeans for crush and lead to larger exports of meal and oil.

OVERVIEW

For 2014/15, global soybean production is up marginally as larger crops in the United States and EU more than offset smaller production in China and Russia. Global trade is down while stocks are up, mainly on account of Argentina. The season average U.S. farm price is unchanged.

For 2013/14, global soybean trade is slightly higher, driven by Brazil and the United States. Global soybean meal trade is lower with reductions in Argentina, Brazil, and the United States. Global soybean oil trade is down with reduced exports by Argentina.

SOYBEAN PRICES

U.S. export bids, FOB Gulf, in September averaged $424 per ton, down $52 from last month, pressured by the beginning of the harvest of a record crop.

As of the week ending October 2, 2014/15 U.S. soybean commitments (outstanding sales plus accumulated exports) to China totaled 17.2 million tons compared to 18.0 million a year ago. Total commitments to the world are 29.7 million tons, compared to 27.5 million for the same period last year.

2014/15 TRADE OUTLOOK

• Argentina soybean meal exports are cut 390,000 tons to 28.8 million, and soybean oil exports are lowered 100,000 tons to 4.1 million on reduced crush.

• Moldova sunflowerseed imports are up 145,000 tons to 146,000, while exports rise 105,000 tons to 325,000 based on trade trends and forecast market demand.

• Russia soybean exports are lowered 200,000 tons to 100,000 on fewer exportable supplies.

2013/14 TRADE OUTLOOK

Argentinasoybean meal exports are cut 500,000 tons to 25.2 million, and soybean oil exports are down 100,000 tons to 4.4 million on reduced supplies resulting from lower crush.

Brazil

o Soybean exports are up 429,000 tons to 46.8 million on year-end data.

o Soybean meal exports are down 152,000 tons to 13.9 million on year-end data.

EUpalm kernel meal imports are down 300,000 to 2.3 million on shipments to date.

India

o Palm oil imports are cut 100,000 tons to 7.9 million on limited late-season trade.

o Soybean oil imports are up 100,000 tons to 1.7 million on higher shipments.

Iraqsunflowerseed oil imports are up 100,000 tons to 400,000 based on growing trade with Turkey.

Moldova sunflowerseed imports are up 152,000 tons to 153,000, while exports leap 155,000 to 375,000 on trade and market trends.

New Zealand palm kernel meal imports are up 250,000 to 2.0 million on large shipments to date.

Philippinescopra meal exports are down 100,000 tons to 425,000 on trade to date.

Russia

o Soybean imports are up 200,000 to 1.5 million on trade data.

o Sunflower meal exports are up 150,000 tons to 1.8 million on pace of trade.

United States soybean imports are down 226,000 tons to a record 2.0 million on final data.

Vietnamcopra meal imports drop 100,000 tons to 110,000 on trade to date.