Prices for soybean oil surged to a 7-month high due to heat in the United States

This week on the Chicago stock exchange CBOT continues the speculative growth of prices for soybeans and oil, caused by forecasts of hot weather without precipitation in the United States and strong demand from China. While the market ignores fundamental factors: the increase in global soybean production and a reduction in global demand as a result of the pandemic Covid-19.

in the Coming days in the Midwest USA will be 28-32 degrees with very little rain, especially in the States of Iowa and Nebraska that can reduce soybean yields, crops which are in the process of loading.

the Weekend will be precipitation in the southern States and Eastern regions of soybean production, which now is approaching hurricane Laura. But will get rains the areas affected by drought, is still unknown.

the Experts after the Pro Farmer crop tour estimated soybean yields in the United States at 52.5 bushels/acre and the gross yield in of 118.7 million tonnes, whereas in the August USDA report, these figures are expected at 53.3 bushel/acre and 120.5 million tons respectively, while in 2019 the soybean crop amounted to $ 98.7 million tons.

On the Chicago Board of CBOT November soybean futures Monday rose by 2.2% to 8-month high of 340 $/ton, while December futures for soybean oil – by 1.9% to 717$/t

the Market is supported by statements of the Chinese authorities about the intention to acquire U.S. in 2020 and 40 million tonnes of soy, which is 10% higher than the record 2016 Total imports of soybeans in China will be 96-98 million tons compared to 95.5 million tons in 2017, But despite active purchases of U.S. soybeans by China in recent times, with the beginning of the year as a whole they have not reached even 20 million tons.

it is Expected that China will increase purchases of soybeans from the U.S. to friends half of the year, but he might have a preference for Brazilian soy, which is against the backdrop of record yields again fall sharply in price.

According to the Agency Conab, due to the increase in acreage in 2020/21 MG Brazil may increase the production of soybean compared with the previous year, to a record 126,55 to 133.5 million tons.

Speculative growth of prices for soybean oil stopped falling of futures for palm oil in Malaysia, the result of reduced demand due to high prices. Export shipments of palm oil from Malaysia for 25 days of August has decreased in comparison with July by 16%.

November futures on palm oil exchange in Malaysia yesterday rose 1% to 2645 Ringgits/t or 634,6 $/t, however, amid the seasonal growth of production in the near future the price will continue to decline.