Soybeans and oil prices rise due to heat and forecasts of lower US harvests

Soybeans rose 1.4% and soybean oil rose 2.4% on the Chicago Stock Exchange yesterday on forecasts of dry and hot weather in the next 7-10 days in US soybean-growing regions, which could dampen production forecasts.

According to a survey of analysts, the average U.S. soybean yield estimate this year will be 51 bushels/acre, down 0.5 bushels/acre from the USDA's July estimate.

Speculative growth in soybean prices was not stopped even by the US MSG data on export sales of soybeans, which for the week amounted to minus 66.7 thousand tons due to the refusal of an unknown buyer from a batch of 569 thousand tons, as well as the cancellation of the sale of 66.4 thousand tons by a Chinese buyer. Demand for soybeans continue to fall due to high prices compared to cheaper palm oil and lower feed grain prices.

According to Oil World, in July soybean exports from the main exporting countries decreased by 20.3% compared to June, from 13.45 to 10.72 million tons, which is 7.3% less than the exports in July 2021. 11 57 million tons. In particular, the export of soybeans from the USA in July decreased from 2.27 to 2.15 million tons (0.96 million tons in July 2021), from Brazil - from 10 to 7.52 (8.67) million tons Paraguay and Uruguay also reduced deliveries.

In July, China reduced soybean imports compared to June from 7.19 to 6.28 million tons (6.5 million tons in July 2021), and the EU - from 1.29 to 0.99 (0.97) million tons .

In general, during the September-July 2021/22 season, the volume of global soybean exports decreased to 137.3 million tons, compared to 146.1 million tons in 2020/21 MR.

According to Platts, the largest spread between soybean and palm oil prices was achieved on August 8. Soybean oil in Brazil on FOB Paranagua for delivery in September was sold at a price of $1,370.17/t, which was $417.17/t higher than the SRO price on FOB Indonesia for delivery in September.

September soybean oil futures in Chicago rose 11% to $1,530/t on the week amid higher palm oil prices, while September futures on the Malaysian exchange rose 11.6% to 4,264 ringgit/t on the week or $960/t, despite rising oil reserves in Malaysia and lower oil prices.

The market expects consumption forecasts to be lowered in the new USDA oil and vegetable oil balance amid a slowdown in the global economy.