Market watching South American estimates in upcoming WASDE
A grain merchandiser says the big number to watch in tomorrow’s World Ag Supply and Demand report from the USDA is South American soybean production.
Kim Holsapple is the Lead Merchandiser for Total Grain Marketing in Effingham, IL. He says the USDA lowered South American soybean production by 5 million metric tons in their January report and he is expecting something similar in the February report.
“The trade is trading something more than a 5 million metric ton cut in soybeans in Brazil and Argentina, I think private trade is more in the 130 range. So I’m not sure that if USDA does back that off to 134 that you’ll get a positive reaction in the market even with a decrease of 5 million metric tons. I think it is going to take something more than that to keep this market supported – perhaps maybe a 132 to be supportive to the market.”
As for the US numbers Holsapple says, “We do look for them to decrease the US carryout on corn and beans maybe 40-50 million bushels on each one, which is a pretty significant decrease, but it is just because of what is going on right now with the Brazil and Argentina crops.”
Brownfield interviewed Holsapple at the Illinois Double Crop Farmers Forum in Mt. Vernon.