Headlines:

  • Strength in soy crush margins ‘down to more than Argentine drought’ – ADM
    The rebound in soybean crushing margins is down to more than Argentine drought, Archer Daniels Midland said, flagging changes in buyer behaviour too – while flagging a cloud over the US ethanol industry. The US-based agricultural trading giant, which on Tuesday cited improved soybean processing profitability as a key driver behind larger-than-expected earnings growth, acknowledged the boost to margins from depressed soy crop prospects in Argentina, the top soymeal exporting country. “The drought in Argentina certainly contributed to the increasing soy crush margins,” Juan Luciano, the ADM chief executive, told investors. In Chicago, the crush margin – in essence, the value of processing products soymeal and soyoil compared with that of raw soybeans – closed at $1.75 per bushel on Tuesday, the best finish on a spot basis since November 2014. The crush has been helped in particular by higher prices of soymeal, a market which Benson Quinn Commodities said “is trading like the masses simply don’t have enough coverage”, with “trade worried about the flow of product”.
  • Bunge lifts profit hopes for 2018, despite fall into the red to start the year
    Bunge painted a brighter picture of 2018 profits prospects despite a bigger-than-expected loss to start the year, highlighting the boost from a “dramatic change” in soybean crush margins, as flagged by rival Archer Daniels Midland too. Bunge, with ADM, Cargill and Louis Dreyfus one of the ABCD group of agricultural trading giants, reported a loss of $29m for the January-to-March period, compared earnings of $39m for the same quarter last year. The loss was equivalent to $0.20 per share, compared with Wall Street expectations of a $0.18-per-share loss. However, the slide into the red reflected a one-time accounting spin-off of the revival in soybean crushing margins trumpeted on Tuesday by ADM, rather than a deterioration in operating performance. A surge in forward soybean crushing margins “resulted in negative mark-to-market of $120m related to forward oilseed crushing contracts”, Bunge said. “As we execute on these contracts during the balance of the year, we expect this impact will be offset by higher margins,” a factor “which is embedded in our revised outlook”

 

Summary:

Severe spring storms will be making their way across the Midwest and into the southern Plains this week which looks to further delay planting progress. According to the National Weather Service, starting Wednesday morning, a frontal boundary of severe storms reaching from the western Great Lakes to southern Texas moving east will bring widespread severe weather including heavy rains, damaging wind gusts, and hail. A cold front will follow the severe weather with temperatures staying at normal to slightly below normal the rest of this week. The strong system will move out Friday providing a warmer, dry weekend favorable for farmers to get back in the field. The grain markets tool a breather today. Corn was essentially flat losing a tick across the board. Beans was down 9.75 to 10.75 cents. Wheat was down marginally giving up 1.50 to 4 cents at the close.