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Global oilseed market: South American oilseed production is reduced, US soybean exports are strong, and oilseeds continue to rise

 Last Update: 2022-04-17
 Source: Internet
 Author: User

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Foreign media March 13 news: In the week ended March 11, 2022, global oilseed prices continued to rise, of which Chicago soybean futures reached $17, a new high in nearly 10 years, mainly because South American soybean production continued to be lowered, and U.
S.
soybean futures continued to rise.
Exports showed off-season growth, the global vegetable oil trend is hot, the competition for spring planting in North America is fierce, and the high inflation expectations in the United States have also prompted speculative funds to use commodities as hard currency to hedge against inflation
.

May 2022 soybean futures on the Chicago Board of Trade (CBOT) settled at around $16.
76 a bush on Friday, up 15.
5 cents, or 0.
96%, from a week ago
.
U.
S.
Gulf No.
1 soybean spot prices averaged $18.
02 a bushel, up 21.
5 cents, or 1.
21%, from last week
.
May 2022 rapeseed futures on the Euronext exchange closed at around 904.
75 euros/ton, up 84 euros or 10.
2% from a week ago
.
The May rapeseed futures on the Intercontinental Exchange (ICE) closed at about C$1,131.
20 per ton, up C$56.
40 or 5.
2% from a week ago; the FOB spot price of Argentine Upper River soybeans was US$707 (including 33% export tax), which was higher than that of the previous week.
It was up $12 or 1.
73% a week ago
.
July 2022 soybean futures on the Dalian Commodity Exchange closed at around 6,196 yuan/ton, down 40 yuan or 0.
6% from a week ago
.
The U.
S.
dollar index closed at 99.
13 on Friday, up 0.
6% from a week earlier
.

　　Uncertain prospects for the situation in Russia and Ukraine, U.
S.
sanctions trigger a rise in global commodities, and inflationary pressures surge

　　The situation in Russia and Ukraine continues to affect the global commodity market, making traders nervous
.
Russian President Vladimir Putin said in a meeting with Belarusian President Alexander Lukashenko on Friday that Russian negotiators said there had been some positive changes in the talks
.
Russia said on Sunday it would continue talks with Ukraine on March 14
.
Leonid Slutsky, a member of the Russian negotiating team, said on Sunday that the talks had made significant progress and that a deal could be signed soon
.
Slutsky is also chairman of the Russian State Duma Committee on International Affairs
.
He expects that the Russian-Ukrainian delegation may reach a common position in the next few days and form a document that can be signed
.
Ukrainian presidential aide Mikhail Podoljak also said the two sides were close to a compromise
.
Over the weekend, Russian forces resumed full ground and air attacks on several locations in Ukraine, including air strikes on a Ukrainian military base more than a dozen kilometers from the Polish border
.

　　At the same time, Western countries led by the United States continue to increase sanctions against Russia.
This week, the United States and the United Kingdom announced a ban on the import of Russian crude oil and natural gas
.
Violent volatility in commodity markets has become the norm
.
On Monday (March 7), Brent crude oil touched $139.
13 and WTI crude oil touched $130.
50, both the highest since 2008
.
Natural gas prices are near records
.
Prices of wheat and copper are near all-time highs
.
London nickel futures doubled in just a few hours on Tuesday, forcing the London Metal Exchange to halt trading in the metal
.
Some investors are betting that commodities will remain elevated for the foreseeable future as the world economy recovers from the pandemic, commodity demand generally grows, and the standoff between the West and Russia over Ukraine puts Russian commodity exports at risk of disruption
.
This also prompted more funds to pour into the commodity futures market to do long
.
Investors have poured $10.
5 billion into commodity-focused ETFs and mutual funds since the start of 2022, adding $2.
8 billion in the week of March 2 alone, the largest since July 2020 Influx in a single week
.

　　The United States will usher in the crucial midterm elections in November
.
Soaring prices are putting increasing pressure on the Biden administration
.
U.
S.
economic data showed that the U.
S.
consumer price index (CPI) soared 7.
9% year-on-year in February, the largest annual increase since 1982, leading the market to widely expect the Federal Reserve to raise interest rates by at least 25 basis points next Wednesday
.
High inflation pressure also led to the influx of market funds into the safe-haven sector, boosting gold to break through $2,000 an ounce
.
Gold futures are up 8.
49% so far this year
.

　　South American soybean production is reduced by 10.
1 million tons, more than expected

　　The U.
S.
Department of Agriculture released a supply and demand report on March 9, which cut global soybean production more than market expectations
.
Among them, Brazil's soybean production was lowered to 127 million tons, down 7 million tons from February
.
In contrast, industry insiders had expected Brazil's output to be cut by 5 million tons
.
USDA also lowered Argentina soybean production by 1.
5 million tons to 43.
5 million; Paraguay by 1 million tons to 5.
3 million; and Uruguay by 0.
6 million tons to 2 million
.
This translates to a combined reduction of 10.
1 million tons in soybean production for the four South American countries
.

　　South American soybean production in 2021/22 is at least 21 million tonnes lower than the previous year, compared with an initial forecast for a 9 million tonnes increase, Thomas Melker, editor-in-chief of Germany's Hamburg Oil World, told an industry conference in Kuala Lumpur this week.

.
Melco forecasts 2021/22 soybean production in Brazil at 125.
5 million tonnes, Argentina at 40.
5 million and Paraguay at 5 million, pointing to a global shortage of soybeans
.

　　Argentina's soybean production was lowered to 40 million tonnes from 40.
5 million tonnes on Thursday on the Rosario Grain Exchange
.

　　U.
S.
soybean export demand is active, export target raised

　　Lower South American soybean supplies boosted soybean prices and a stronger premium for soybeans in Brazil made buyers more willing to buy more attractively priced U.
S.
soybeans, so this month the U.
S.
Department of Agriculture increased 2021/22 U.
S.
soybean exports by 40 million bushels , to 2.
09 billion bushels; U.
S.
soybean crush remained unchanged at 2.
215 billion bushels; ending stocks were lowered to 285 million bushes from 325 million bushels
.

　　The U.
S.
Department of Agriculture's weekly export sales report showed that net sales of soybeans in the United States for the 2021/22 season were 2.
2 million tons in the week ended March 3, significantly higher than last week and 76% higher than the four-week average.
1.
1 million tons in China
.
Net sales in 2022/23 are 0.
9 million tonnes, of which 800,000 tonnes are to China
.
So far in 2021/22, U.
S.
soybean export sales totaled 52.
37 million tons, down 13.
2% year-on-year
.

　　Market signals to sell soybean stocks

　　Soybean prices rose sharply as South American soybean production declined and the outlook for exports of Black Sea sunflower seed products was uncertain
.
Chicago soybean futures have risen nearly $4.
70 a bushel or 38 percent since early December, reaching $17.
07 a bushel on March 8
.
However, the price increase of the new season 11 soybean futures is relatively small ($2.
6/bu or 21%), which also makes the premium of old beans relative to new beans continue to expand
.
The premium in November 2021 was close to 2%, compared with as high as 15% in early March
.
The USDA sees this market signal as encouraging farmers to sell inventories now rather than hold until the fall 2022 harvest
.
But the high price of old soybeans has also led those buyers who can afford to wait to choose to wait and see or buy soybeans in the forward position
.
As can be seen from the U.
S.
soybean export sales data, sales of new soybeans have accelerated significantly
.
Since the outbreak of the Russian-Ukrainian crisis on February 24, from February 25 to March 11, U.
S.
exporters have reported cumulative sales of 2.
22 million tons of soybeans to China and unknown destinations, of which 43.
5% (966,000 tons) were sold in 2021/2021.
22 delivery, 56.
5% are delivered in 2022/23
.

　　China soybean imports and crush targets cut

　　Although China has recently accelerated its purchases of U.
S.
soybeans, this month the U.
S.
Department of Agriculture lowered its soybean imports from China for the second consecutive month, from 97 million tons forecast last month to 94 million tons, a decrease of 5.
8% from the previous year
.
The domestic crush was also lowered to 92 million tons from the forecast of 94 million tons last month, as the crushing profit fell or lost money, slowing down the crushing pace
.

　　As the trade war and the global COVID-19 outbreak highlight supply chain risks, coupled with geopolitical factors, China's desire to boost domestic oilseed production and reduce import dependence means that China's soybean import demand in 2021/22 is likely to reverse decades of growth trend
.
According to the "14th Five-Year Plan" National Planting Industry Development Plan issued by the Ministry of Agriculture of China, China's soybean production will increase to about 23 million tons by 2025, an increase of 17.
3% over 2020 and a 40.
2% increase over 2021
.
The agricultural supply and demand report of the Ministry of Agriculture of China in March shows that farmers and traders in Northeast China are more reluctant to sell, and the domestic soybean price may fluctuate at a high level.
500 yuan
.
Due to the reduction in soybean production caused by the drought in South America, the international soybean price is high.
The average price range of imported soybeans after CIF tax is 4,100-4,300 yuan per ton, which is 500 yuan higher than last month's forecast
.

　　Follow Spring Sowing

　　As the spring planting season approaches, the market is increasingly concerned about the prospect of spring planting in the northern hemisphere
.
The U.
S.
Department of Agriculture will release a survey on spring planting intentions in 2022 at the end of this month
.

　　According to the quarterly weather report released by the US weather agency NOAA, there is a 53% chance that La Niña conditions will continue to occur in the northern hemisphere between June and August 2022
.
The precipitation outlook for the next three months appears to be in line with the La Niña pattern
.
Dry weather is expected in the southern half of the U.
S.
, but more rain is expected in the Pacific Northwest and the Ohio River Basin
.

Oilseed Prices Soybeans U.
S.
Exports Vegetable Oil

　　Uncertain prospects for the situation in Russia and Ukraine, U.
S.
sanctions trigger a rise in global commodities, and inflationary pressures surge

　　South American soybean production is reduced by 10.
1 million tons, more than expected

　　Argentina's soybean production was lowered to 40 million tonnes from 40.
5 million tonnes on Thursday on the Rosario Grain Exchange
.

　　U.
S.
soybean export demand is active, export target raised

　　Market signals to sell soybean stocks

　　China soybean imports and crush targets cut

　　Follow Spring Sowing

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