Chinese Ministry Boosts Soybean Market

Just when traders expected China to begin cancelling soybean orders, the China Commerce Ministry says they expect 4.61 million tonnes of soybeans will be imported in January, which is larger than expected.\r\n   The result is a higher soybean market in overnight trading, which is helping to support corn and wheat markets, although these markets are seeing demand support of their own. \r\n   South Korea bought US corn and optional-origin feed wheat, and Japan bought Canadian wheat.\r\n   However, weekly ethanol production was reported lower on Wednesday, although the year-to-date pace remains at 10% above last year, which is above the USDA’s estimate of production running 7.5% above last year.  So some pullback in production could be expected.\r\n   And December’s National Oilseed Processors Association crush, at 165.384 million bushels, was well above the 163.9 million average guess, and was a record monthly crush number.\r\n   Weekly export sales data this morning was better than expected for corn and soybeans but in line with expectations for wheat. \r\n   Corn sales were reported at 821,000 tonnes, well above trade expectations of 300,000 to 550,000 and last week’s sales of 155,200 tonnes.\r\n   Soybean sales were reported at 701,500 tonnes for 2013-14 and 525,300 tonnes for 2014-15.  The trade was looking for combined sales of 750,000 to 1.1 billion.  Last week sales were reported at 156,200.\r\n   Wheat sales were reported at 319,900 tonnes for 2013-14 and 82,000 tonnes for 2014-15.  The trade was looking for combined sales of 350,000 to 600,000.  Last week, sales were reported at 294,800.\r\n   Interior corn basis levels are declining as farmers sell old-crop bushels in the wake of the January USDA crop report, analysts said.  Farmers appear to be focusing on moving corn with a lower emphasis on soybeans, although they’re selling soybeans, too.\r\n   Farmer selling is so active that there are reports of long lines of trucks at local elevators waiting to unload.  Such a glut of trucks wishing to unload is causing its own problems, and there are reports of elevators closing early and even of processors taking measures to slow the line to handle incoming corn and soybeans.\r\n   That could cause futures markets to relax.\r\n   Cattle markets shot higher again Wednesday, pushing to a new record high of $141 to $142 per cwt on a live basis, $2 higher than last week’s record.  It’s hard to tell how much trading was done at these numbers, but more could be done today since boxed-beef was higher again Wednesday.\r\n   However, the pork cutout was down $0.94 Wednesday, and traders are said to be looking at pork as a cheaper alternative to expensive beef at the retail counter.\r\n   However, beef cutout levels continue to rocket higher as tight supplies allow packers to pass along most of the latest cost increases for fed cattle, market analysts said.  How long they can keep this up is anybody’s guess.\r\n   The USDA reported sharply higher boxed beef prices Wednesday, setting another record high for the ninth straight day, amid fairly good demand and light offerings from the packers.\r\n   The USDA’s choice cutout was reported at $224.62 per cwt, up $3.58 on the day, while the select cutout also set a new record high at $221.91 per cwt, up $2.56.\r\n   The choice/select spread widened to $2.71, and AgResource said it expects it to get near zero as product availability tightens and buyers seek the less-expensive select product.  There were 112 load of fabricated product sold into the spot market Wednesday.\r\n   The CME Feeder Cattle Index for the seven days ending Tuesday is $171.16, up $0.01 on the day.  By contrast, the Jan feeder cattle contract settled Wednesday at $169.40 per cwt, up $0.80.\r\n