The global oilseed market: bad news is coming, oilseed prices are falling

 

On Friday, the Chicago Board of Trade (CBOT) November soybean futures fell 74.
25 cents, or 5.
4%, from a week ago, to close at 1290.
75 cents per cat
.
The average spot price of Meiwan No.
1 yellow soybeans was US$14.
0075 per cat (US$514.
7 per ton), down 71.
5 cents or 4.
87% from a week ago
.
The Euronext exchange's November 2021 rapeseed futures closed at about 557.
50 euros/ton, a decrease of 9.
5 euros or 1.
7% from a week ago
.
The intercontinental exchange (ICE) November rapeseed futures fell by about 29.
4 Canadian dollars or 3.
3% to close at 864.
90 Canadian dollars/ton; the FOB spot price of Shanghe soybeans provided by the Argentine Ministry of Agriculture was US$521 (including 33% export tax), compared with A week ago it was down 27 US dollars or 4.
93%
.
On the Dalian Commodity Exchange, soybeans closed at 5,701 yuan/ton in November, up 53 yuan or 0.
9% from a week ago
.

 

　　This week the US dollar exchange rate hit a 9-month high
.
The US dollar index closed at 93.
46 points on Friday, up 1% from a week ago
.

 

　　The global commodity market fell sharply this week, including markets such as crude oil and metals
.
The Fed may cut monetary stimulus measures ahead of schedule, triggering a rise in the US dollar exchange rate, and worries that the rapid spread of delta mutant strains will slow down the recovery of the global economy, reducing investor risk appetite, and global commodity markets falling across the board
.

 

　　U.
S.
soybean production may be higher than government expectations

 

　　This week, Pro Farmer, a subsidiary of American Farm Futures Magazine, conducted a four-day annual field trip to seven major soybean-producing states in the Midwest.
It is estimated that the U.
S.
soybean production will be 4.
436 billion cats this year, with an average yield of 51.
2 cats.
/Acre, respectively higher than the 4.
339 billion bu/acre forecast by the US Department of Agriculture in August
.

 

　　The weekly crop progress report released by the US Department of Agriculture on Monday showed that as of the week of August 15, the excellent and good rate of US soybeans was 57%, a decrease of 3% from a week ago and 72% in the same period last year
.
The soybean pod setting rate is 81%, and the five-year average is 79%
.
About 31% of soybean farmland is in moderate to severe drought, an increase of 1% from a week ago
.
In the past week, some areas of the Midwestern United States saw favorable rains, and there will be more rains from the weekend to the beginning of next week, which is conducive to boosting soybean yield potential
.

 

　　The U.
S.
government may lower the demand for compulsory blending of biofuels

 

　　Chicago soybean oil futures fell sharply on Friday.
Among them, the benchmark December soybean oil futures closed down 5.
5% because the US Environmental Protection Agency (EPA) may recommend to the White House to reduce the amount of US biofuel blending in 2021 to lower than 2020 levels
.
In recent months, lobbying groups including the US oil industry and the food industry have put pressure on the Biden administration to reduce mandatory biofuel blending requirements
.
If the mandatory blending requirements are lowered, the demand for crops for biofuel production will be greatly reduced, especially soybean oil
.
In the past five years, the use of soybean oil in the US biofuel industry has increased by more than 85%
.
If the compulsory blending of biofuels is reduced, the amount of biodiesel that refineries need to blend in fossil fuels will drop, thereby weakening the demand for soybean oil
.
The U.
S.
Department of Agriculture predicts that the domestic soybean oil consumption in the United States for the year 2021/22 (October to September of the following year) is expected to be 25.
2 billion pounds, of which 11.
5 billion pounds are used to produce biodiesel, accounting for 45.
6%
.
In the first seven months of this year, Chicago soybean oil futures prices have risen by 63%, reaching 63 cents per pound.
Since August, soybean oil futures have fluctuated back down
.
As of August 20, December soybean oil closed at 56.
65 cents per pound, a drop of about 10 percentage points from the end of July
.

 

　　U.
S.
soybean crush hits its lowest level in four years in July

 

　　The National Oilseed Processing Industry Association (NOPA) said that the soybean crush of member companies in July was 4.
221 million tons, an increase of 1.
8% from the previous month, but a decrease of 10.
2% year-on-year, which was the lowest level since 2017.
Due to the reduced supply of soybeans, some The factory stopped production for maintenance
.
In its August supply and demand report, the US Department of Agriculture lowered its forecast for 2020/21 US soybean crush by 15 million bushes to 2.
155 billion bushels to reflect the impact of the recent slowdown in crushing
.

 

　　U.
S.
soybean export sales accelerate

 

　　The US Department of Agriculture's weekly export sales report shows that in the week ending August 19, the US 2020/21 soybean net sales were 68,000 tons, which was lower than the 97,000 tons in the previous week
.
Net sales in 2021/22 were 2.
142 million tons, higher than the 1.
12 million tons in the previous week
.
So far this year, the total US soybean export sales in 2020/21 reached 62.
08 million tons, an increase of 31.
3% over the same period last year
.
The United States sold 92,300 tons of old beans and 1.
03 million tons of new beans to China that week
.

 

　　The most eye-catching feature of the recent soybean market is that the USDA has announced single-day export sales for 11 consecutive days
.
From August 5 to 19, private exporters reported a total of 2.
71579 million tons of soybeans, of which 1.
245 million tons were sold to China, 1.
3222 million tons were sold to unknown destinations, and nearly 150,000 tons were sold to Mexico
.

 

　　La Nina weather may appear again this winter

 

　　Soybean planting work in South America for the year of 2021/22 will begin next month, and the market has begun to pay attention to the possible La Niña phenomenon
.
The Climate Prediction Center of the National Weather Service said this week that the El Niño-Southern Oscillation (ENSO) has a 60% chance of being neutral for the rest of the summer
.
However, La Niña may appear between August and October, and it will continue until the winter of 2021/22
.
Between November this year and January next year, the probability of La Niña appearing in the northern hemisphere will reach 70%
.
The Buenos Aires Grain Exchange stated in a weather report that the temperature of the Pacific Ocean is expected to begin to drop in October, leading to a weak La Niña phenomenon
.
This weather phenomenon usually causes dry weather in Argentina and affects soybean yield potential
.