Soybeans: US pork market under pressure
April 14, 2020 at 4:05 PM ,
Der AUDITOR
At USD 8.52 per bushel, soybeans in Chicago were 0.5 % lower than shortly before Easter. US soybean meal was 2.1% lower at midday, while soybean oil in Chicago was 3.6% lower. Price pressure came from two directions. The 9.7 million barrel reduction in crude oil production volume decided by the OPEC Plus Group will not be sufficient to offset the current slump in demand of 30 to 35 million barrels per day due to the Covid-19 pandemic. There was also price pressure in the USA due to declining sales of restaurant meat such as steaks and chicken wings. According to Rabobank, meat consumption in the USA and Canada fell by 30% in March. Smithfields, the world's largest pig slaughtering company, announced the indefinite closure of one of its largest US plants in the city of Sioux Falls in North Dakota. Last year, demand for US pork had risen sharply as China imported more of it due to African swine fever, and then the US meat industry increased production significantly in anticipation of China's growing purchases. However, the introduction of quarantine, first in China and then in the US, reduced demand for pork in both countries, which will have a negative impact on demand for soybeans and corn.
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Soy meal LP (44/7), prices in EUR/mt |
||||
|
FOB |
4/20 |
5/20 |
6-7/20 |
8-10/20 |
|
Rotterdam |
- |
- |
299.00 |
299.00 |
|
Hamburg |
338.00 |
324.00 |
299.00 |
296.00 |
|
Mainz |
361.00 |
339.00 |
307.00 |
306.00 |
|
Straubing |
405.00 |
381.00 |
345.00 |
335.00 |
|
Trade sources |
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WASDE report expects higher US soy stocks
The export control for US soybeans of 442,000 metric tonnes was in line with lowered expectations of US trade. The trade estimates for the NOPA crush, the results of which will be published tomorrow, were 175.16 million bushels, significantly higher than last month's result of 166.29 million bushels and 170.01 million bushels last year. According to customs data, Beijing bought a good 7.81 million metric tonnes of US soybeans in the first quarter of 2020. However, China's soybean imports in March were the lowest in five years at 4.28 million metric tonnes. China had tried to import more soybeans from Brazil. When rain and the Covid-19 pandemic delayed Brazil's export shipments, China switched back to US goods and had to release 500,000 metric tonnes of soybeans from Sinograin stocks last week. The WASDE report was slightly bullish after the USDA reduced global soybean end-stocks by 2 to 100.45 million metric tonnes. However, US soybean stocks increased by 1.5 to 13.07 million metric tonnes. The USDA reduced Brazil's soybean crop by 1.5 to 124.5 million metric tonnes and Argentina's crop by 2 to 52 million metric tonnes.
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