Soybean and canola prices fell by 6% and 5.2% per day

After the market realized that China would not increase its purchases of soybeans from the US, soybean prices in Chicago fell 6% yesterday, dragging down quotes for canola in Winnipeg and rapeseed in Paris.

 

Over the weekend, US Treasury Secretary Bessant met with Chinese counterparts in Paris to prepare for the meeting between Presidents Trump and Xi on March 31. After that, the Chinese side announced that it was ready to buy more US agricultural goods, but did not confirm the purchase of an additional 8 million tons of soybeans, which Trump announced last month.

 

On Sunday evening, President Trump announced a possible delay to his meeting with Xi, while also calling on China to help unblock the Strait of Hormuz.

 

The situation where Iran began to allow ships of only those countries that agree with it to pass through the Strait of Hormuz puts Trump at a disadvantage in the war in the Middle East.

 

The 50% increase in oil prices in a month caused by the war with Iran significantly supported oilseed prices, but they were limited by significant supply and subdued demand.

 

March futures for US soybeans in Chicago rose 6.5% to $450/t in the month, but fell 6% to $424.4/t yesterday under pressure from reduced processing in February and fading hopes for a pick-up in exports.

 

Soybean exports from the US in the current season decreased by 28% compared to the previous one, to 28 million tons.

 

According to NOPA, in February, soybean processing in the US decreased by 1.5% compared to January, but amounted to a record 5.68 million tons for this month, while soybean oil stocks increased to 944 thousand tons, which was 38.4% higher than last year.

 

According to AgRural, as of March 12, soybeans in Brazil have been harvested on 61% of the area (70% last year), and the yield remains quite high, so Chinese importers are switching to purchasing cheap Brazilian soybeans.

 

May canola futures on the Winnipeg Exchange rose 9.6% in the month, but fell 5.2% yesterday to 703 CAD/t or $514/t on forecasts of reduced demand for Canadian oil from the US due to increased domestic soybean processing.

 

Following canola prices, May rapeseed futures on the Paris exchange also fell 2.6% on Monday to €498.5/t (+1.4% month-on-month) or $572.8/t.

 

Soybean prices in Ukraine remain at a high level of $445-450/t due to increased domestic demand, but a sharp drop in Chicago quotes may increase pressure on export demand prices and turn them downward.

 

According to Reuters, Canadian farmers may sow more canola than the 8.82 million hectares projected by the country's Statistics Office due to rising canola prices and the search for "safe" crops to grow in the face of geopolitically unstable demand.