The transfer of signing a trade agreement with China lowers the price of soybeans
Yesterday, soybean futures in Chicago fell 1% to 7 week low – 332,75 $/t for reporting the date of signing the first trade agreement with China, which initially planned to sign in November, then in December and now delayed until next year.
Both sides say the negotiations have become increasingly complex. USA can't make a decision about the reduction of tariffs, and China does not believe that the agreement will be signed before the end of the year.
China by delaying the signing of the agreement had the opportunity to buy in the United States 10-20 million tons of soybeans, of which it will last until February, when the markets come out cheaper Brazilian and Argentinian soybeans.
On the physical market for us soybeans is now worth 358-359 $/t FOB, which is significantly inferior to the price of Brazilian soybeans, which is offered at 367-368 $/t FOB.
China is stepping up purchases of new crop soybeans from Argentina and Brazil with delivery in February-March and soybeans old crop from the Persian Gulf to the increase of the refining margins, due to rising prices for vegetable oils.
the January futures for palm oil on the Chinese stock exchange in DAlan rose 3% to a record level 799,15 $/t, since the reduction in the production of soybean oil increased demand for palm.
Futures on palm oil in Malaysia rose yesterday ue of 2.7 percent to the highest since November 2017. level – 644,8 $/t. This has supported prices for soybean oil in Chicago despite the decline in soybean prices.
Experts expect that the reduction of soybean imports to China will increase purchases of vegetable oils, which will increase world demand.
In Ukraine, after the rapid growth in the last month, prices for soybeans at the port dropped to 340-343 $/t And the processors left them at the level of 8500-9000 UAH/t with delivery to the plant.
the Decrease in stock quotes of soy will put pressure on procurement prices in Ukraine, to limit further growth of prices for soybeans.