Yesterday, USDA announced export sales of: 132,000 metric tons of new crop soybeans to China. 332,000 metric tons of new crop soybeans to unknown. I say again, be slow to price new crop beans.
India is by far the world’s largest importer of urea. They bought about 1.5 million last October and paid ugly high prices, some over $1000 per mt as I recall. Last Thursday, India opened offers for another one plus million mts of urea. The market expected they would have to pay an average of US$700 per mt delivered.
Yesterday, India issued its first public report of the urea tender:
Most market offers were $650 - $675 and went down from there. The accepted delivered price - UNDER $600 (note includes the cost of ocean freight) with over 3 million mts offered.
Brazil new crop soybean export sales are a record large 12.82 million tons as of February 4th. That is 1.3 million mt more than last year’s record for February 4th. However, the soybean basis at the ports lost 13 cents yesterday.
The US soybean crush margin finished at the lowest level yesterday since mid-December, while still profitable, but a declining crush margin certainly is not bullish news.
Argentina has long been the world’s leading exporter of soybean meal. Low water on the rivers the past year have stifled grain movement and soybean buyers have had to go elsewhere else to get the quantities of meal needed. That somewhere else is the USA. Soybean meal has firmed around the world in recent days while soy oil has followed palm oil sharply lower.
Yesterday morning Canada reported:
Wheat stocks were 15.56 million mt, down 9.5 million mts from a year ago. The trade was expecting 17.5 million mt. Durum inventory is 2.1 million mt vs. 2.0 million expected and 4.806 million a year ago. Canola stocks were 7.6 million mt vs. 7.5 million expected and 13.259 million last year.
The Tech Guy’s market philosophy:
The market is the world’s most efficient business. Human nature has difficulty trusting the market because it is unlike any other business. The market’s business is to produce and deliver products and services where and when needed.
We see the market doing its business this winter to make sure we have enough nitrogen fertilizer for the 2022 crops and that the world does not run out of soybeans, corn, wheat, and yes, even oats. The only time the market fails us is when government tries to control or manipulate it. Here is the 50 year chart of the market's management of the soybean supply and demand:
This morning: Crude oil is at $89.32, down 0.04 The dollar index is at 95.57, down 0.07 March palm oil is at 5675 MYR, up 139. The contract high was made on February, 7th, at 5,876 MYR. Palm oil owns 32% and soybean oil owns 28% world market share. March cotton is at $126.55, down 0.60. The contract high was made February, 1st at $129.37 per cwt. Cotton competes with soybeans and corn for acres. March natural gas is at $4.224, down 0.024. The contract high was $6.132 at October, 6th, 2021. Natural gas is the primary cost to manufacture nitrogen fertilizer. March ULSD is at $2.7983 per gallon, down 0.0057. The contract high was $2.9318 made 7 February. Diesel fuel is more important to most of you than oats.
Rain Days Update
Rondonópolis, Mato Grosso, in the heart of Brazil's most productive soybean area, received 0.3 inches of rain yesterday; 0 inches a year ago and 0.5 inches two years ago (one inch = 24.5 mm). Yesterday's high temperature was 77°F. Day time highs the next ten days will range from 85 to 89°F (100°F = 38°C). Yesterday, in the dry areas of South America: Santa Maria high temperature 90°F with 0 inches rain. Cordoba high temperature 94°F with 0 inches rain. Salto high temperature 89°F with 0 inches rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 0.31 inches, 85 to 96°F. Cordoba 0.56 inches, 70 to 93°F. Salto 0.16 inches, 78 to 94°F. The Western Corn Belt has 2 more rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 3 more rain days than yesterday.
Explanation of Rain Days
Every day, every place in the world has a ten day weather forecast issued many weather services.
By a "place", we mean a Findlay, Ohio; Arcadia, Minnesota; Atlantic, Iowa; Fullerton, Nebraska; Cordoba, Argentina; Craig, Colorado, Saratov, Russia and ten million localities we have never heard of.
The ten day forecast predicts the high and low temperature for each day as well as whether or not rain is predicted for each of the ten days, likewise cloudy, partly cloudy, sunny, etc.
We look at the ten-day forecast and if we see rain is predicted for 4 of the next 10 days, we record a "4" for that location on the chart for the today. It does not matter whether it is one-hundredth of an inch or 5 inches. We realize about half the days expected to receive rain never get rain that day, but we must be consistent in what we report each day and every day because rain makes grain a few key weeks of the growing season. Of course, we scan the temperatures and the amounts of rain just to see if anything is getting way out of the norm.