Oilseeds - Oils

Soybeans: Brazil expands Northern Arc

May 25, 2020 4:10 PM, Der AUDITOR
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CHICAGO. The US soybean market was under the influence of political tensions between the USA and China, with the autonomy of Hong Kong at stake, which drove the dollar and crude oil exchange rate. In the US, stock exchanges will remain closed today due to the Memorial Day holiday. The Itaipu Dam was opened to raise the low water level of the Parana River. In Brazil, the expansion of the so-called Northern Arc is underway.

US soybeans in Chicago remained almost unchanged from last Friday at USD 8.33 per bushel. Soybean meal rose by 0.5%, soybean oil fell by 0.5%. Stock exchanges in the USA will remain closed today due to the Memorial Day holiday. In addition to processing restrictions in Argentina, the soybean market was driven by political tensions between the USA and China. Beijing wants to intervene strongly in Hong Kong's legislation and push through a new security law. The US threatens to respond sharply if China infringes on Hong Kong's special status. US dollar and crude oil increased. Production cuts by the OPEC Plus Group of 9.7 million barrels per day, as well as additional cuts by Saudi Arabia, the UAE and Kuwait are having an effect. With the simultaneous decline in US shale oil production, the oil supply has been reduced to such an extent that the crude oil markets are picking up again slightly. WTI rose by 4.3% to USD 33.4 per barrel and Brent by 1.7% to USD 35.1 per barrel. Doubts were also raised about a rapid economic recovery in China, after Beijing decided to forego a second economic forecast for the second half of the year due to the Covid-19 pandemic. Zero growth for 2020 is conceivable there, it was said. China's economy is also said to have more and more bad loans bunkered, which is a burden on the economy there.

Soy meal LP (44/7), prices in EUR/mt

FOB

6/20

7/20

8/20

9-10/20

Rotterdam

-

299.00

293.00

293.00

Hamburg

300.00

293.00

291.00

291.00

Mainz

310.00

305.00

304.00

304.00

Straubing

328.00

323.00

322.00

322.00

Trade sources

Itaipu dam opened to raise the level of the Parana River
Soybean meal benefited from processing bottlenecks in Argentina, where pandemic-related processing in April fell to 3.66 million metric tonnes of soybeans, 4.2% less than last year and the second lowest April result in seven years. Argentinean farmers are also reportedly holding back their soybean crop at this time, as they expect the Argentinean currency, the peso, to depreciate against the US dollar. After one month of negotiations, the Itaipu dam was opened to raise the low water level in the Parana River at the port junction of Rosariowieder, after ships could be chartered with only 20% of the cargo volume. In Brazil, the expansion of the so-called Northern Arc is underway, which connects the city of Sinop in the north of Mato Grosso via a 933 km long railway line with the port of Miritituba on the Tapajos River in the state of Para, which ultimately provides access to the Atlantic Ocean via the Amazon river.

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