Saturday, August 24, 2013

Peak protein follow up from July 2012

With recent market action and weekend weather forecasts for USA,
it got me to thinking about a newsletter I wrote back in July 2012.

I posed the question of Peak Protein?  What would it look like?

USA was in full drought mode. Brazil and Argentina were left with
job to fill in the global soybean needs.

The markets rallied until Sept 4th, 2012 and basically
did what they needed to do.

With a big USA crop for 2013, all problems solved.  right?

We now see crop size estimates for USA soybeans at 3.1 billion bu.

With strong demand, USA needs every last bushel.

Deja vu? 2012

With late season hot, dry weather the odds of a smaller soybean
crop are increasing. Could the crop be smaller than 2012?
That does not seem possible???  

Carryover for 2013 soybeans into 2014 will now be as tight as the 
previous season.

Brazil and Argentina will respond with bells on. wink wink....

In the USA, there will be perceived shortages again in summer 2014.

Brazil and Argentina et al will harvest 160 million ton in the interim.

The globe will have plenty but spots like USA will not have enough
cheap soybean meal.

The same logistical nightmares will all repeat again in South America.
Roads, trucks, strikes, ports  etc, etc.......

We have a scenario of peak protein again. The world in general
cannot get ahead of the demand curve. Shipping of soybeans is always
"Just in time".

If USA only produces 3 billion bushels again for 2013, the world
needs to depend on South America one more time.

Brazil must fill in the holes in the soybean demand DAM.

It should be no problem,  but what if????  fill in the blank.

Excerpt from JULY 2012 newsletter

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