Global oilseed market: export sales slow down, high prices may start to curb demand

Foreign media news on February 28: As of the week of February 26, 2021, the global foodmate.
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Although most of them are still rising, they have fallen from their multi-year highs in early trading on Thursday.
foodmate.
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html" class="zdbq" title="Soy-related food information" target="_blank">Soybean supply is tight, oilseeds and finished products demand prospects are optimistic, spring sowing competition is fierce, and continue to support high soybean prices; at the same time, after recent price increases, high prices seem to have begun to curb demand.
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html" class="zdbq" title="Feed related food information" target="_blank">feed demand, long before the arrival of the end of profit open interest increased to suppress oilseed prices from the highs.

 

　　On Friday, the Chicago Board of Trade (CBOT) May soybean futures rose approximately 24.
25 cents from a week ago to close at 1,404.
25 cents per bushel.
The average spot price of US No.
1 soybeans was $14.
8375 per cat, up 28.
5 cents from a week ago.
The Euronext exchange's May 2021 rapeseed futures closed at approximately 491.
50 euros/ton, an increase of 30 euros from a week ago.
The intercontinental exchange (ICE) May rapeseed futures rose by about 3.
7 Canadian dollars from a week ago to close at 739.
20 Canadian dollars/ton; the FOB spot price of soybeans in the Shanghe region of Argentina was 542 US dollars (including 33% export tax), down from a week ago 16 dollars.
The Shanghe spot price of Argentine soybean meal was US$455.
36 per ton, down US$9.
15 from a week ago.
The Dalian Commodity Exchange reported 5,913 yuan/ton for soybeans in May 2021, an increase of 19 yuan from a week ago.

 

　　On Friday, the US dollar index closed at 90.
93 points, up 0.
7% from a week ago.

 

　　The surge in Treasury bond yields pushes investors to reset their risk appetite

 

　　In the past week, the commodity market showed a trend of rising and falling, which seems to be related to the resetting of investors' risk appetite.
Although the central bank, including the Federal Reserve, is still committed to maintaining sufficient liquidity to support economic growth, as the new crown vaccination work progresses, the growth of new crown cases worldwide, especially in the United States, has slowed down, and more and more people are beginning to predict The pace of global economic recovery will accelerate.
Although Fed Chairman Powell has repeatedly assured the Fed in congressional hearings that the Fed will maintain low interest rates and monetary easing, the prospect of a strong economic recovery has made many investors assess that the timing of interest rate hikes may be advanced.
As investors dumped U.
S.
bonds, the U.
S.
long-term Treasury bond yield rose to its highest level in a year.
The 10-year U.
S.
Treasury bond yield was reported at 1.
459%, an increase of 11.
5 basis points from a week ago and an increase of 36.
9 basis points in February, which means that the actual Interest rates or borrowing costs have risen, and the dollar exchange rate has rebounded.
Given the fact that many commodities have set new highs for many years in a row this week, is there a better time than to take advantage of the end of the month to make profit taking and adjust the investment portfolio? So on Thursday and Friday, commodities fell sharply.
On Friday, the Bloomberg Commodity Index fell 2.
1%, US crude oil fell 3%, London copper fell more than 4%, gold fell 2.
6%, corn fell 1.
2%, and wheat fell 2.
5%.

 

　　Re-inflation trading and super cycles

 

　　Although the pressure of liquidation at the end of the month is prominent, the high inflation expectations brought about by the large amount of money printed in the United States continue to attract a large amount of funds into the commodity market for so-called "re-inflation transactions.
" The US House of Representatives on Friday (Saturday morning Beijing time) passed the US$1.
9 trillion COVID-19 rescue plan with a narrow majority.
If the Senate also votes next week, President Biden will sign the bill to provide assistance to American families and the unemployed.
, Many Americans will receive a check for $1,400.
This will also be the third time that the United States has provided large-scale new crown stimulus.
Hundreds of billions of newly printed US dollars will enter the market every month to provide sufficient liquidity for the US financial market.
This will also reduce the purchasing power of the US dollar and stimulate inflation expectations.

 

　　As the global epidemic subsides and the demand outlook improves, the pace of supply recovery is clearly lagging behind the growth momentum of demand.
More and more investors believe that inflation may get out of control and enter those commodity markets where the balance of supply and demand is particularly tight.
Some investment banks, including Goldman Sachs, believe that this is just the beginning of a long-term bull market for many years-that is, the "super cycle.
"

 

　　The weather in South America and the progress of soybean harvesting and launching continue to be the focus of the market

 

　　This week, the oilseed market went out of wide swings.
In the first three trading days, the US soybean market continued to climb.
Among them, May soybean futures hit a new contract high of 1,445.
75 cents/pu in early trading on Thursday.
Brazil’s soybean harvest has been slow this year.
As of February 18, the harvest progress was only 15%, the slowest pace in the same period in a decade.
Coupled with rainy weather, the pace of Brazilian soybean exports was slow, which was lower than previously expected.
According to data from the Brazilian government, Brazil’s soybean exports in January were only 49,500 tons, which was far lower than the 1.
397 million tons in the same period last year and the lowest point since 2014.

 

　　According to consulting firm Datagro, South American soybean production in 2020/21 is lower than earlier expectations, but it is still the highest in history.
The area planted to soybeans in South America in 2020/21 is expected to be 61.
69 million hectares, lower than the 61.
95 million hectares previously predicted, but an increase of 2% from the 60.
33 million hectares of the previous year, which will be a record high.
The company expects South American soybean production in 2020/21 to reach 19694 million tons, which is lower than the November forecast of 20129 million tons, but an increase of 2% from the previous year's record of 19256 million tons.
Among them, Brazil’s soybean harvested area data is raised by 4%, from 37.
39 million hectares to 38.
76 million hectares; Brazil’s soybean production reached 136.
68 million tons, an increase of 7% from the record of 127.
1 million tons in the previous year.

 

　　The soybean harvest area in Argentina has been reduced from 17 million hectares to 16.
9 million hectares.
Soybean production is expected to be 46.
5 million tons, lower than the 51 million tons previously predicted.
However, the final production scale still depends on the weather in March.

 

　　High prices may curb export demand, Chinese buyers wait and see

 

　　Over the past week, Chicago's grain and soybean futures have fallen back from their recent surge.
There are signs that high prices may start to curb demand.
The US Department of Agriculture report shows that Chinese buyers did not purchase American aging beans in the first half of February, and the purchase volume of new beans was only two ships.
This has also led to lower-than-expected US soybean export sales.
As of the week of February 18, US soybean net sales for 2020/21 were only 167,900 tons, which was 63% lower than last week and 72% lower than the four-week average.
So far this year, US soybean export sales totaled 59.
95 million tons, an increase of 77.
9% year-on-year.
However, if Brazilian soybean exports continue to slow, it may prompt Chinese buyers to increase purchases of US soybeans.
Market rumors say that Brazil's soybean exports from April to May this year may be lower than the US soybean exports.

 

　　Soybean and rapeseed crushing demand is strong

 

　　Statistics Canada said this week that Canadian rapeseed crush in January 2021 was 915,553 tons, which was higher than the crush level in December, an increase of 7.
1% year-on-year and 12.
4% higher than the three-year average.
It is also the third highest in history.
Behind the records set in October and November 2020.
The reason for the strong crushing pace is the soaring soybean oil price, the profitable crushing, the 29 basis point drop in the Canadian dollar exchange rate and the good weather in January.
The rapeseed crush so far this year is 5.
285 million tons, an increase of 4.
4% year-on-year and 9.
9% higher than the three-year average.

 

　　In Argentina, data released by the Argentine Ministry of Agriculture show that in January 2021, Argentina’s soybean crush reached 3.
22 million tons, an increase of 297.
5% from the 810,000 tons in December.

 

　　In the United States, NOPA said that the soybean crush of member companies in January was 184654 million bushels, a record high over the same period in history and the second highest crush in all months in history, second only to October 2020.

 

　　Next Monday, the USDA will release crush data for January.
Analysts expect the US soybean crush in January to be 195.
2 million cats, higher than the 188.
8 million cats in the same period last year and a record high for the same period in history.

 

　　In China, lower-than-expected arrivals of Brazilian soybeans may force processing plants to reduce operations.

 

　　A new type of African swine fever epidemic in many places in China raises demand concerns

 

　　Although China is working hard to increase its live pig inventory, news of the emergence of new types of African swine fever in many places has poured cold water on the soybean meal market.
On Friday, Dalian soybean meal futures fell 5.
2% at one point because the market worried about reduced feed demand.

 

　　Analysts pointed out that the Ministry of Agriculture of China issued a notice requiring all localities to strengthen control of the African swine fever epidemic.
This will undoubtedly bring pressure to the market.

 

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