U.S. soy product futures ended lower. Soyoil stumbled after climbing to a new two-year high overnight, backpedaling on broader-based weakness with 2% declines in crude oil influencing prices, analysts said. Soymeal futures slipped in unison with the rest of the complex, falling prey to speculative profit taking after setting a new 1-year high overnight. December soyoil settled 0.23 cent or 0.5% lower at 48.24 cents a pound. December soymeal ended $4.40 or 1.3% lower at $333.40 a short ton. (Source: CME)
USDA Forecasters Under Fire After Deep Cut in Corn Crop Estimate (Source : CME)
A flaw in government projections for the U.S. corn crop is contributing to a recent surge in prices and undermining confidence in the estimates. The U.S. Department of Agriculture this month predicted a larger-than-expected fall in U.S. corn production, triggering a rally in agricultural commodities that is rippling through into higher food prices. The agency admits its computer models failed to account for the declining quality of what is still seen as the third-largest corn crop on record until late in the harvest season. However, critics maintain government forecasters should have been aware of what was happening in the fields.
"Our confidence in the USDA to have any reasonable numbers available to us has been shaken to the very core," said Dennis Gartman, publisher of the Gartman Letter, an influential industry newsletter. Traders and analysts lean heavily on the agency's crop reports, and while forecasting isn't an exact science, USDA estimates have historically been on target and retain a strong influence on global commodity prices. The fallout from the Oct. 8 corn report promises to be a key area of discussion when USDA officials gather with the industry for an annual data users' meeting in Chicago on Monday. A senior USDA official said the sharp cut in corn output reflected problems in estimating the average weight of corn kernels, leading it to reduce its forecast twice since predicting a record crop in August.
Corn crop forecasts are based on surveys of farmers' expectations and actual field visits. Joseph Prusacki, director of the statistics division for USDA's National Agricultural Statistics Service, said the August forecast was made despite the uncertainty over kernel weights. Lacking hard data, Prusacki said USDA officials followed the typical practice of using a historical, five-year average for kernel weight in its model, which also includes a count of corn ears and projections for how much of the crop won't be harvested. Prusacki said the estimated kernel weight missed the mark. Some analysts said USDA staff should have recognized corn ears were underdeveloped and included that in their models. Damage was apparent in fields in August because the crop was more advanced than usual because of early planting and warm weather.
"Are these people even getting out of the truck?" asked Jim Gerlach, president of A/C Trading, an Indiana-based brokerage. "Anyone who's walked a field knows corn yields were short." Some observers view the problems with USDA forecasting seen this year as an anomaly, rather than a signal that forecasting methods need to be overhauled. Damage to the crop was based on "a unique set of circumstances related to weather that we're unlikely to see again," said Emerson Nafziger, an agronomist at the University of Illinois.
U.S. soy up on China demand, corn recovers
SYDNEY/MADRID, Oct 21 (Reuters) - U.S. soybean futures extended a rally to a fresh 14-month high, supported by strong Chinese demand, but grains futures came off the day's highs on a spike in the dollar.
"The move is almost exclusively currency-related after Geithner's comments," said Garry Booth, a senior adviser at MF Global Australia. "The strength in the U.S. dollar certainly took the shine off prices," he said.
Hit two-year highs on demand, palm above 3,000 rgt
KUALA LUMPUR, Oct 21 (Reuters) - Dalian soyoil hit a 26-month high and Malaysian palm oil rose above 3,000 ringgit as traders bet strong vegetable oil demand will continue to drive soybean crushing in China.
"There are lots of excuses to be a bull in the vegetable oil market," said a regional vegetable oil trader in Malaysia. "Apart from China, the weaker dollar is making soybeans more attractive and investors are getting back into commodities in a big way again."
Indonesia to import 1.6 mln T soybeans in 2010-assoc
JAKARTA, Oct 21 (Reuters) - Indonesia is forecast to import 1.6 million tonnes of soybeans this year, up from a previous forecast of 1.4 million and a third higher than imports last year of around 1.2 million tonnes, an industry official said.
Ali Basry, director of the Indonesian representative office of the American Soybean Association, told Reuters on Thursday the higher imports were because of unusually wet weather reducing local soybean production.
China snaps up LatAm soy, imports 5 mln T-trade
SINGAPORE, Oct 21 (Reuters) - Chinese soybean processors are aggressively snapping up South American new-crop soybean cargoes, with 5 million tonnes booked so far, or a quarter higher than a year ago, traders said on Thursday.
"The demand is strong as the crush margins are pretty good," said one Singapore-based trading manager with an international trading company that has direct sales to China.
China 2010/2011 soy import seen at record 54 mln T-CNGOIC
BEIJING, Oct 21 (Reuters) - China, the world's largest soy importer, is likely to import 54 million tonnes of the oilseed in 2010/2011 (Oct/Sept), according to the latest estimate by an official think tank.
The revision is due to China's rising demand for vegetable oils and protein meal, said the China National Grain and Oils Information Centre (CNGOIC) in a report posted on its web site (www.grain.gov.cn).
Paraguay soy sowing seen up despite weather doubts
ASUNCION, Oct 20 (Reuters) - Paraguay's soy farmers plan to plant 2.8 million hectares of soybeans in 2010/11, up slightly from the previous year when they gathered a record harvest, growers said on Wednesday.
The landlocked, South American country is the world's fourth-biggest supplier of the oilseed, although it trails far behind neighboring Brazil and Argentina -- the No. 2 and No. 3 exporters, respectively.
US to subsidize farmers to grow new biofuel crops
WASHINGTON, Oct 20 (Reuters) - The U.S. government plans a half billion dollars in subsidies to help farmers grow the next generation of biomass crops -- switchgrass and woody plants instead of corn, farm lobbyists and congressional staff workers told Reuters.
Agriculture Secretary Tom Vilsack will announce the subsidy program on Thursday, they said. An estimated $525 million would be paid over 15 years to defray farmers' costs.
US soy up on China demand, corn slips on firm dollar
SYDNEY, Oct 21 (Reuters) - U.S. soybean futures extended a rally to a fresh 14-month high, supported by strong Chinese demand, but all grains futures came of the day's highs on a spike in the dollar.
"The move is almost exclusively currency related after Geithner's comments," said Garry Booth, a senior advisor at MF Global Australia.
China 2010/2011 soy import seen at record 54 mln T-CNGOIC
BEIJING, Oct 21 (Reuters) - China, the world's largest soy importer, is likely to import 54 million tonnes of the oilseed in 2010/2011 (Oct/Sept), according to the latest estimate by an official think tank.
The revision is due to China's rising demand for vegetable oils and protein meal, said the China National Grain and Oils Information Centre (CNGOIC) in a report posted on its web site (www.grain.gov.cn).
China 2010/11 corn demand seen up, supply deficit likely-JCI
BEIJING, Oct 21 (Reuters) - China's corn consumption is expected to grow to 160 million tonnes in 2010/2011 (Oct/Sept) and production at 153 million tonnes, with a supply deficit seen at 7 million tonnes, an influential private consultance company said.
China, the world's second-largest consumer, is expected to import 5.8 million tonnes of corn next year, according to estimates by the Shanghai JC Intelligence (JCI) Co Ltd.
Malaysia palm oil tops 3,000 ringgit first time in 2 years
KUALA LUMPUR, Oct 18 (Reuters) - Malaysian crude palm oil futures rose above 3,000 ringgit for the first time in more than two years as strength in other vegetable oil markets and the weaker dollar boosted prices.
The benchmark January contract on the Bursa Malaysia Derivatives Exchange rose as much as 1.2 percent to 3,021 a tonne -- a level last traded on July 31, 2008.
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