Oilseeds - Oils

Soybeans: COFKO dampens import expectations

May 18, 2020 4:18 PM, Der AUDITOR
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CHICAGO. The US soybean market gained some ground again. Good results in the NOPA report and the US soybean export control system provided a boost to the market. The market was also supported by the renewed increase in demand for pork. China's soybean warehouses appear to be filling up more and more, so that imports there could collapse somewhat over the summer months. Argentina has massive logistical problems due to low water levels on the Parana River.

US soybeans in Chicago in the afternoon were up 0.8% on last Friday at just under USD 8.46 per bushel. Soybean meal rose by 0.1%, soybean oil by 1.0%. Prices initially benefited from the latest NOPA report, according to which US soybean processing rose to 171.754 million bushel in April, which is 0.7% above the trade estimates. The Export Inspectorate ranked at the upper end of expectations with 795,000 metric tonnes. US soybean sowing had advanced by 38% by 10 May. The US trade is expecting a shift in cultivation in favour of soybeans and less corn cultivation. IEG Vantage has estimated the US soybean area for the 2020 crop at 85.9 million acres, compared with the very low USDA forecast of 83.5 million acres. This means that US farmers will still be rededicating corn acreage to soybeans. However, expected rainfall over the Midwest is expected to slow down the progress of cultivation somewhat.

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


























Trade sources

Argentina's logistics problems are increasing
Now it seems that China has stocked up on cheap Brazilian soybeans well into the summer months and will have to slow down soybean imports until then. The reason was the low Brazilian real. Since the beginning of the year, the Brazilian currency has fallen by more than 32%. COFCO International apparently believes that China's supplies will probably peak around July and August, which could exacerbate the price pressure on soybean meal and soybean oil as China has less demand. According to the grain exchange in Buenos Aires, 87% of the soy crop has been harvested in Argentina so far, the crop forecast remains at 50 million metric tonnes, while the USDA had last reckoned 51 million metric tonnes. Logistical problems caused by low water levels on the Parana River in Rosario have recently been worsened by a lack of river bank reinforcement south of Rosario. The ships could be loaded with only 11.000 metric tonnes compared to 50.000 metric tonnes otherwise, it was said.


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