Highlights
CONAB (Brazil’s USDA) production estimates were released yesterday morning:
Soybean production: 146.8 mil mts, down 2.6 mil from last month and 8.2 mil below USDA.
Corn production 112.7 mil mts, down 900,000 mts from Feb and 13.3 mil below USDA.
Both estimates were smaller than the market expected.
The corn/bean ratio is at 2.51 bushels of corn to buy 1 bushel of beans, up from 2.45 to 1 on Feb 29. Normal ratio is 2.4 to 1. It means the market is trying to buy bean acres.
Cash corn and soybean traders in Brazil continue to withdraw spot (cash grain prices) offers from the export market, especially from the northern ports, and redirect the offers to the domestic market. However, export traders in Brazil say that over the last two weeks, China has purchased ~50 cargoes, covering all of its soybean crush needs for March, 66% of April, and 40% of May. They also say the soybean basis at China ports is looking a bit weaker, which is perfectly logical if they got all their March and two-thirds of April’s crush needs covered. But, can Brazil fill all those ships? Not the way the basis market conditions are now.