Soy commentary: Futures set for 3rd straight loss, as Brazil sales soar

Futures eased down for the third straight day on Friday, losing around 1% of its value compared to a week ago, as concerns over the US carry out start to grow.

Beans for delivery in March on the Chicago Board of Trade opened largely where they settled at $9.85/bu, but headed south for much of the day – touching a fresh two-week low of $9.77/bu.

At time of publishing they were valued at $9.79/bu.

The bearishness was put down to disappointing US export sale figures on Thursday, which were well behind market expectations.

And a private sale of 108,860 mt of soybeans for delivery to Mexico failed to lift the gloom.

“It’s quiet today and notable that the only export notice we have had for a while on beans is to Mexico. We are in the queue behind Brazil right now,” said one trade source on condition of anonymity.

 “I haven’t seen it yet, but I guess there are several '18/19 soybean carryout projections of over 700 million bushels for the US,” said a second source.

Next week the USDA will release its world supply and demand estimates, where once again much of the focus for soybeans will be on the US carry out figure following an impressive start to the year for Brazil exports and a poor one for the US.

On Thursday, Brazil’s ministry of industry, trade and foreign services said that the nation exported almost 69 million mt in the February 2016 through January 2017 period, up a third on the year. January exports were up 70% on a like-for-like basis.

And on Friday, consultants AgRural said Brazil's harvest would reach 116.2 million mt, a new record.

On the cash markets, according to one source, at least 14 cargoes this week were sold from Brazil versus just one from the US, with the vast majority, if not all, headed to China.

Those cargoes were all for new crop with loading over the next two-and-a-half months and done at around 40 cents over March futures for USG FOB March, 155-160 cents over March futures for on a CFR China basis and a 6-7 cent premium over Paper Paranagua for FOB Brazil.

In other news, the line-up out of Brazil is just short of 6 million mt over the next few weeks, largely expected as the new crop hits the bins.

In the CIF market the US Gulf, bids were largely unchanged in the mid-30s for both Feb and March.

Argicensus lowered its FOB quote to 40 cents over March futures for February and March loading.

In Brazil, the paper at Paranagua was stable pegged at 60-61 cents over March futures for March loading.

However, on the back of the reported deals and a softer real that slid to 3.21 to the dollar, Agricensus reduced its FOB Santos assessment 2 cents to 65 cents over March futures for both Feb and March beans.

April FOB material out of Santos still looks at a 6-cent premium over the paper.

China was still pegged at around 156 cents over March futures for March delivery, equating to around $417/mt.