Global oilseed market: the weather market is full of hype, oilseed prices fall

 

On Friday, the Chicago Board of Trade (CBOT) November soybean futures fell by about 40 cents or 2.
87% from a week ago, to close at 1,351.
75 cents per cat
.
The average spot price of Meiwan No.
1 soybeans was 14.
705 US dollars per cat, down 58.
75 cents or 3.
84% from a week ago
.
The Euronext exchange's November 2021 rapeseed futures closed at about 530.
25 euros/ton, a decrease of 13 euros or 2.
39% from a week ago
.
The intercontinental exchange (ICE) November rapeseed futures fell by about 34.
1 Canadian dollars or 3.
72% from a week ago, to close at 883.
40 Canadian dollars/ton; Argentina’s Shanghe soybean FOB spot price was 528 US dollars (including 33% export tax), compared with a week ago The previous decline was $16 or 2.
94%
.
The Dalian Commodity Exchange's September soybean closed at 5,676 yuan/ton, down 182 yuan from a week ago
.

 

On Friday, the US dollar index closed at 92.
91 points, up 0.
2% from a week ago, and this is the second consecutive week of gains
.

 

First, pay attention to the growth of US soybeans
.
The U.
S.
Department of Agriculture's weekly crop report showed that as of July 18, the blooming rate of soybeans in the United States was 63%, and the five-year average was 57%
.
The soybean pod setting rate is 23%, and the five-year average is 21%
.
The excellent and good rate of soybeans is 60%, higher than 59% a week ago, but lower than 69% in the same period last year
.
The US GFS weather forecast at noon on Friday indicated that there will be more rainfall in most parts of Iowa and central Illinois later next week
.
As far as the weather in the next two weeks is concerned, the weather in the United States predicted by the GFS model will be drier than the European weather model
.

 

　　This week, some areas of the Canadian prairies ushered in rainfall, stabilizing the rapeseed crop
.
The Canadian Department of Agriculture and Agri-Food predicted this week that Canada’s rapeseed production will reach 19 million tons this year, which is far higher than analysts’ forecasts of 16-17 million tons, and also higher than the 18.
7 million tons in 2020, which is detrimental to rapeseed prices
.
Statistics Canada will release forecast data based on surveys in August
.
In its July supply and demand report, the U.
S.
Department of Agriculture lowered the Canadian rapeseed production for the year of 2021/22 by 300,000 tons to 20.
2 million tons
.
Analysts pointed out that taking into account the recent weather conditions in the prairie region, the actual output will be far below the government's expectations
.

 

　　Recently, US soybean demand has been sluggish, and Chinese buyers are basically absent
.
The US Department of Agriculture’s weekly export sales report shows that for the week ending July 15, US soybean net sales for 2020/21 were only 62,000 tons, which was 22% lower than the four-week average
.
So far this year, the total US soybean export sales have reached 62 million tons, an increase of 33.
6% year-on-year
.
The United States did not sell any old beans to China (Mainland China) that week, only 6,000 tons of new beans were sold
.

 

　　According to data from the General Administration of Customs of China, China imported 10.
48 million tons of soybeans from Brazil in June 2021, an increase of 14% from May, setting a record for the second time.
In June, China imported 54,806 tons of soybeans from the United States, a year-on-year decrease of 80%
.
It is currently in the off-season for US exports to China because of the tight supply of old beans
.
According to industry insiders, as domestic soybean crushing profits are still at a loss, and the use of wheat in feed formulations is increasing, demand for soybean meal remains sluggish, which means that the pace of China's soybean imports may continue to slow in the remaining months of this year
.
Some analysts predict that China's soybean imports in 2021/22 may be less than 100 million tons, or even 97 million tons, which is lower than the 102 million tons expected by the US Department of Agriculture
.

 

　　In South America, Argentina is currently facing the impact of the low water level of the Parana River, which has led to a 25% reduction in the weight of grain vessels in the port of Rosario
.
The continued depreciation of the peso exchange rate has also slowed down the pace of farmers' sales
.
As of July 14, Argentine farmers sold 25.
1 million tons of soybeans, down from 27.
2 million tons in the same period last year
.
Despite the high international soybean prices this year, Argentine farmers are reluctant to sell soybeans because the peso exchange rate continues to fall, and holding soybeans is more cost-effective than holding pesos
.
The Argentine government recently reduced the mandatory blending rate of biodiesel from 10% to 5%, which means that the demand for soybean oil in the biodiesel industry will decrease and the export supply may increase accordingly, which puts pressure on the Chicago soybean oil market
.

 

　　In Brazil, farmers will plant soybeans for the next year in September, and institutions generally believe that the area planted to soybeans in Brazil will continue to grow
.
The consulting agency Pátria Agro Negócios (PAN) predicts that the sown area of ​​soybeans in Brazil will increase by 6.
7% to 40.
85 million hectares in 2021/22; soybean production is expected to be 144.
7 million tons, an increase of 6% year-on-year
.
Celeres expects that the soybean planting area in Brazil will increase by 1.
5 to 2 million hectares in 2021/22 due to the high profitability of the planting
.
Safras & Mercado predicts that the soybean area in Brazil in 2021/22 will reach a record 39.
82 million hectares, an increase of 2.
3% year-on-year; soybean production is expected to be 142.
24 million tons, 3.
7% higher than the current year’s 137.
19 million tons
.

 

　　From a global perspective, the global production of major oilseeds in 2021/22 is expected to increase, and the output is expected to exceed the demand by 7 to 8 million tons, which is entirely due to the increase in soybean production
.
A well-known analysis agency in Germany predicts that the global output of seven major oilseeds in 2021/22 will reach 603.
9 million tons, a year-on-year increase of 32.
8 million tons, of which soybean output will reach 379.
4 million tons, an increase of 19.
98 million tons over the previous year, mainly due to Brazilian output Improve
.
The world's sunflower seed production will also increase to a record 57.
7 million tons
.
However, the global rapeseed production in 2021/22 is likely to be lower than expected, because the Canadian rapeseed production is expected to drop significantly, only partially offset by the increase in the production of the EU-27, Ukraine and Australia
.