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

 

On Friday, the Chicago Board of Trade (CBOT) November soybean futures rose 62.
5 cents or 4.
70% from a week ago to close at 1,391.
75 cents per cat
.
The average spot price of Meiwan No.
1 soybeans was 15.
2925 US dollars per cat, up 78.
25 cents or 5.
39% from a week ago
.
The Euronext exchange's November 2021 rapeseed futures closed at approximately 523.
25 Euros/ton, an increase of 20 Euros or 3.
82% from a week ago
.
Intercontinental Exchange (ICE) November rapeseed futures rose by about 73.
5 Canadian dollars or 8.
71% from a week ago, to close at 917.
50 Canadian dollars/ton; Argentina's Shanghe soybean FOB spot price was 544 US dollars (including 33% export tax), compared with a week ago The previous increase was 27 US dollars or 5.
22%
.
The Dalian Commodity Exchange's September soybean closed at 5,858 yuan/ton, down 1% from a week ago
.

 

　　On Friday, the US dollar index closed at 92.
71 points, up 0.
7% from a week ago
.

 

　　First we understand the macro background
.
Earlier this week, Fed Chairman Jerome Powell reiterated that the Fed will maintain accommodative policies
.
Although the data showed that US consumer prices and producer price indexes soared in June, Powell’s speech at a congressional hearing stated that the performance of the US job market and the progress the Fed hopes to see before reducing its support to the economy “still Some distance", and the current high inflation will ease in the coming months
.
Analysts pointed out that Powell's speech showed that despite the hot inflation data, the Fed will maintain a fairly loose policy
.
In China, data from the China Bureau of Statistics on Thursday showed that China's GDP in the second quarter increased by 7.
9% year-on-year, which was lower than the 8.
1% expected by analysts
.
Analysts believe that monetary policy may be more accommodative in the second half of the year to support economic growth
.
Last week, China unexpectedly lowered the deposit reserve ratio of financial institutions by 0.
5%, which caused market participants to speculate that China might further ease monetary policy
.
Some market observers said that the benchmark lending rate may be lowered next
.

 

　　Judging from the trend of the global oilseed market, it can still be described as hot, hot cooking oil
.
As the supply of mature soybeans and other oilseeds is only tight, the global demand for vegetable oil continues to increase, prompting further price increases in order to adjust demand
.
The Canadian prairies and the northern Midwestern region of the United States have dry weather, high temperatures, and bleak production prospects for rapeseed crops.
Competitive vegetable oils, especially palm oil, have also been affected by lower-than-expected production growth due to the epidemic-related lockdown
.
At the same time, in order to curb the pressure of food inflation, India has lowered import tariffs on vegetable oils, while China's domestic edible oil stocks are low, which also boosted edible oil import demand
.
All this means that US soybeans, which are entering a critical growth period, have become the center of the market's attention, and the characteristics of the weather market are incisively and vividly expressed
.

 

　　According to the weekly crop progress report released by the US Department of Agriculture on Monday, as of July 11, the blooming rate of soybeans in the United States was 46% and the pod setting rate was 10%
.
The excellent and good rate was 59%, the same as a week ago and 68% in the same period last year
.
Weather forecasts show that the Midwestern United States will be hot and dry in the next 10 days, and soybean crops usually enter a critical growth period from the end of July to early August
.

 

　　The U.
S.
Department of Agriculture maintained the US soybean supply and demand data unchanged in its July supply and demand report.
The output is expected to be 4.
405 billion bu, and the yield is expected to be 50.
8 bu/acre, both unchanged from the previous month’s forecast
.
Soybean ending stocks also remained unchanged, still at a multi-year low of 135 million cats
.
The ending stocks of US soybeans in 2021/22 are expected to be 155 million cattails, which is also a low level
.
The U.
S.
Department of Agriculture also lowered the Canadian rapeseed production in 2021/22 by 300,000 tons to 20.
2 million tons because of the continued drought in the Canadian prairie
.
If the rainfall does not improve significantly, production may be further reduced
.
The Canadian Department of Industry and Agri-Food (AAFC) expects Canadian rapeseed production in 2020/2021 to be 21 million tons, higher than 2020's 18.
7 million tons
.
However, the supply of rapeseed in the new season has dropped due to the sharp decrease in the beginning inventory
.

 

　　From the perspective of US soybean demand, high prices have indeed begun to affect demand
.
The National Oilseed Processors Association (NOPA) released a monthly press report showing that the soybean crush of its member companies in June was 152.
4 million bushels, which was even lower than the lowest level expected by the market and the lowest monthly crush in two years.
The reason lies in the tight supply of soybeans and high prices, prompting companies to stop work for maintenance
.
In terms of exports, in the week ending July 8, US soybean net sales for 2020/21 were 21,700 tons, which was 66% lower than last week and 76% lower than the four-week average
.
So far this year, US soybean export sales totaled 61.
93 million tons, a year-on-year increase of 34.
4%
.
As of the week ending July 8, the United States did not sell old American beans or new beans to China (Mainland China)
.
For comparison, China bought 18,100 tons of American Chendou in the previous week
.

 

　　As China has significantly slowed its purchase of US soybeans recently, the USDA lowered its 2020/21 soybean import forecast by 2 million tons to 98 million tons this month
.
The forecast value of China's soybean imports in 2021/22 is lowered by 1 million tons to 120 million tons
.
The U.
S.
Department of Agriculture pointed out that China's soybean stocks are already at a high level.
As imports exceed the monthly crush, the stocks continue to grow
.
In addition, the huge supply of pork in China has suppressed the price of live pigs, and the profitability of breeding has declined, which has also caused a decline in demand for soybean meal at least in the short term
.
Due to the huge supply of soybeans, the price of soybeans for delivery in the fourth quarter of this year has fallen, so global soybean exports are expected to decrease in the next three months—that is, before the new soybean harvest in the United States
.

 

　　According to data from the General Administration of Customs, China imported 49 million tons of soybeans in the first half of this year, a year-on-year increase of nearly 9%
.
China's soybean imports in June were 10.
72 million tons, an increase of 11.
6% month-on-month, mainly due to the arrival of Brazilian soybeans
.

 

　　The U.
S.
Department of Agriculture currently estimates that Brazil's soybean production in 2020/21 will be 137 million tons, which is the same as the June forecast
.
The National Commodity Supply Company (CONAB), a subsidiary of the Brazilian Ministry of Agriculture, raised the 2020/21 soybean production forecast in Brazil to a record 1391.
2 million tons, slightly higher than the previous forecast and 11.
067 million tons or 8.
9% higher than the previous year
.

 

　　The Brazilian Association of Grain Exporters, ANEC, estimated that Brazil’s soybean exports in July reached 8.
955 million tons, which was higher than last week’s estimate of 7.
64 million tons and also higher than last July’s 8.
05 million tons
.
The export volume in June this year was 10.
13 million tons
.
At present, most Brazilian soybeans have been exported
.