Indiana Grain Company, LLC

Posted: 02/11/10

By: tomgrisafi

The Delta Farm Press is out with an interesting report highlighting the bulls vs. the bears when it comes to where soybean prices may be headed.

Bearish news: The Chinese government is selling over 200,000 tons of soybeans from state reserves. Chinese soybean crushers have thin margins or negative returns. Will Chinese soybean demand remain high? How much Chinese demand will go to South America?

Private sources predict 66.5 tons of soybean production from Brazil and 55 million tons of production in Argentina. That total over 121 million tons is the highest estimate so far and over a million tons higher than the highest USDA estimate.

Weekly soybean exports of 384,000 tons were bearish below market expectations by 40 percent. Russia stopped imports of U.S. poultry, limiting use of soy-meal and grain. Brazilian soybean harvest is 10 percent complete. Private estimates of the Brazilian crop exceed USDA estimates by a million tons.

Bullish news: Argentina has too much rain and potential flooding of bean and corn fields. Argentine soy-oil production is down 19 percent.

USDA is predicting a million less acres of soybeans will be planted. Yield projections of 43 bushels per acre puts production near 3.5 billion bushels which is near current annual use. USDA expects 25 million more soybean exports. Ending stock estimates were lowered 35 million bushels.

Source: The Delta Farm Press