Global oilseed market: Global oilseed prices have fallen and geopolitical risks have receded

 

The Chicago Board of Trade (CBOT) January 2023 soybean futures closed at about $14.
2825/bu on Friday, down 1.
5% from a week ago; The average spot quotation of No.
1 yellow soybean in the November schedule of the US Gulf was $15.
8825 per bushel, down 2.
35%.

CBOT's January soybean meal was at $406.
10 per short tonne, up 0.
6%; January soybean oil futures closed at 70.
61 cents a pound, down 5.
3%; Euronext's February 2023 futures closed at around Eur610.
25/mt, down 4.
1%.

Intercontinental Exchange (ICE) January rapeseed closed at C$847/mt, down 4.
1%; Argentina's upper river soybean FOB spot quotation was $596 per tonne (including 33% export tax), down 2%.

 

International crude futures tumbled around 9 percent this week, hitting their lowest price since late September, on concerns about the Fed's interest rate hike and a weaker
outlook for energy demand due to the pandemic in China.
The West Texas Intermediate (WTI) January contract on the New York Mercantile Exchange (NYMEX) closed at $80.
11 a barrel on Friday, down 9.
1%
from a week ago.
Brent crude futures, the global benchmark, for January, were at $87.
62 a barrel, down 8.
7 percent
from a week ago.

 

The ICE dollar index closed at 106.
826 on Friday, up 0.
6 percent
from a week ago.

 

Global geopolitical risks have receded over the past week, while economic concerns have intensified
.
On Monday (November 14), the Chinese and US heads of state met three and a half hours before the start of the G20 meeting in Bali, which was the first face-to-face meeting in nearly three years since the outbreak of the new crown pneumonia epidemic, and this was also the first face-to-face meeting between the two heads of state since Biden became president, which helped ease global geopolitical tensions; The UN announcement on Thursday that the parties to the agreement agreed to continue implementing the Black Sea export agreement, which was extended for 120 days from Friday (November 18), also helped ease concerns about
the disruption of Black Sea exports.

 

At the same time, frequent hawkish comments from Fed officials this week have cooled market expectations of the Fed's policy shift; After China optimized its epidemic prevention and control policies, the national epidemic situation was severe and complex, which also brought some uncertainty
.

 

The USDA's weekly crop progress report shows that the U.
S.
soybean harvest is nearing its end, and seasonal harvest pressure is waning
.
As of Nov.
13, U.
S.
soybeans were harvested 96 percent, compared with 91 percent a year ago and a five-year average of 91 percent
.
As new beans hit the market, domestic crushing seasonally increased
.
The National Association of Oilseed Processors (NOPA) reported that member companies crushed 184.
464 million bushels of soybeans in October, fully in line with market expectations, up 16.
7% month-on-month and 0.
3% year-on-year, mainly due to strong demand for soybean oil and soybean meal, and crushing profits at record
highs.
In its November supply and demand report, the USDA raised the 2022/23 U.
S.
soybean crush by 10 million bushels to 2.
245 billion bushels, the second consecutive monthly increase, up 1.
9%
from 2.
204 billion bushels in 2021/22.

 

In terms of exports, U.
S.
soybean export sales to China surged ahead of the U.
S.
-dollar summit, as Chinese buyers took advantage of falling U.
S.
soybean prices to expand purchases to meet domestic crushing demand
。 In the week ended November 10, US 2022/23 net soybean sales reached 3.
03 million mt, the largest weekly sales since September 17, 2020, double the same period last year, and US net sales to China (mainland) in the week were 1.
54 million mt, up from 930,000 in the previous week and 730,000 mt in the same period last year, which also brings the total US soybean export sales (including loaded and unloaded sales) to 35.
98 million mt so far in 2022/23.
This was up 4.
2% year-on-year, compared to a 0.
4%
year-on-year decrease in the previous week.
Among them, sales to China were 20.
96 million tons, an increase of 11.
2% year-on-year, compared with a year-on-year increase of 7.
2%
in the previous week.

 

Soybean planting in Brazil is in full swing and will accelerate further with recent rains in some areas
.
Brazilian soybean planting progress reached 73.
9% as of November 11, 2022, up from 65.
1% a week ago, but down from 78.
1% a year earlier, as a lack of precipitation slowed
in the Midwest, according to data released by Brazilian consultancy Homestead Agribusiness (PAN).
The average planting progress over the same period of the past five years was 61.
8%.

Agricultural weather forecasts released Friday by the U.
S
.
Data Transmission Network showed rain will continue in central Brazil next week and remain dry in the south over the weekend.
A cold air front will bring sporadic showers to the south early next week, after which the weather becomes dry
again.
Due to the rains some time ago, the current dry situation in the south is not a concern, but if the dry weather continues into December, it will raise concerns about the damage
to the potential of soybean yields.

 

With La Niña appearing for the third year in a row this year, there are concerns about crop yields hurting and farmers are slow
to pre-sell.
As of Nov.
4, Brazil's 2022/23 soybean pre-sales were just 19.
1 percent of expected production, up 1.
7 percent from the previous month and the slowest pace since 2014, down from 28.
2 percent a year ago and below the historical average of 32.
5 percent
, consultancy Datagro said.
Pre-sales of new beans in the same period of 2020 reached a record 53.
4%, as La Niña typically causes drought in the south, increasing the risk of
soybean failure.
In addition, the new government is about to take office, and the uncertainty of policy has also made farmers very cautious
.

 

In Argentina, rumors suggest the government may restore preferential soybean exchange rates to encourage exports to earn foreign exchange
.
This has a potentially negative impact
on soybean prices.
In addition, the Buenos Aires Grain Exchange (BAGE) said that the past week saw rainfall in the Pembas crop belt, but the rainfall was uneven, and many areas remained dry, meaning that large areas still need more precipitation to complete soybean planting
in the short term.
As of November 16, Argentina's 2022/23 soybean planting progress reached 12%, 16%
lower than the same period last year.
Weather forecasts released Friday by the U.
S
.
Data Transmission Network showed that soil moisture remained below normal in most areas despite recent showers.
A weaker front of cold air will bring sporadic rainfall to the south in the coming days, although rainfall will be scattered and not all areas will see rain.

Overall, next week's weather will remain predominantly
dry.
In the coming weeks, South American weather will be increasingly a market concern
.

 

Global soybean production in 2022/23 is expected to reach a record 388 million mt, up 9% from last month's estimate, as soybean production estimates for the United States and Brazil are revised
upwards, according to the International Grains Council's monthly report on November 17.
Brazil's soybean production forecast was raised to 145.
8 million tonnes from 147.
5 million tonnes, up 17.
4%
year-on-year.
U.
S.
soybean production is expected at 118.
3 million tonnes, up from 117.
4 million tonnes forecast last month and 2.
6 percent
lower than the previous year.
Global soybean trade is expected at 167 million tonnes, slightly higher than last month's forecast of 166.
5 million tonnes, up 7.
8%
year-on-year.
Global soybean ending stocks are expected at 54 million mt, slightly higher than last month's forecast of 53.
9 million mt and well above last year's 45.
5 million mt
.
The IGC expects China's soybean imports in 2022/23 to be 95.
8 million mt, slightly lower than the 96.
3 million mt forecast last month and 89.
7 million mt last year.