Improvements in the state of soybean crops in the US and increased supply of canola are putting pressure on soybean quotes

2022-08-03 12:46:20
Machine translation
Improvements in the state of soybean crops in the US and increased supply of canola are putting pressure on soybean quotes

The weather in the US, the largest producer of soybeans in the Northern Hemisphere, is helping the crop. And political tensions between the U.S. and China could soon put pressure on prices, especially given higher forecasts for global canola and canola production.

 

In addition, quotations are pressured by a further decrease in palm oil prices and another decision by the Indonesian authorities to reduce the reference price of oil for the calculation of export duty, as well as to increase the permission for exporters to sell oil abroad 9 times more than in the domestic market (previously it was in 7 times).

 

September palm oil futures on the Malaysian exchange yesterday fell 5.7% to 3,841 ringgit/t or $862/t, losing 11.3% in two sessions.

 

The U.S. heat last week may have had a negative impact on soybean crops, but as of July 31, the number of crops in good or excellent condition was up 1% to 60% from a year ago, according to Crop Progress. The heat and precipitation predicted for next week will accelerate the ripening of soybeans, the development of which is slower than last year.

 

November soybean futures on the Chicago SWOT fell 6% to $510/t from Monday, and increasing political differences with China will increase pressure on prices.

 

China has promised consequences for the US after Congress Speaker Pelosi's visit to Taiwan, but it is likely to be an economic boycott of US goods rather than military aggression against Taiwan or the US. China will be able to cut back on U.S. soybean purchases if forecasts of an increase in soybean acreage and yield in Brazil come to fruition, as planting weather in September and October was not particularly favorable.

 

According to the Brazilian analytical company Brazil Soy, soybean production in the country in FY 2022/23 may reach 152.6 million tons compared to 127.2 million tons in FY 2021/22.

 

In Ukraine, uneven rainfall resulted in damage to some soybean crops in the central regions, which reduces the prospects of the harvest. Thanks to the increase in the dollar exchange rate, the purchase prices for soybeans have risen to UAH 10-11.5 thousand/t with delivery to the factory, but the increase in the supply of rapeseed and rapeseed meal in the EU will again reduce the demand for soybean meal, which remains much more expensive than sunflower or rapeseed

 

Export prices for non-GMO high-protein soybeans delivered to Poland, Romania or Hungary have fallen to $450-480/t DAP, but demand remains low.

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