Soybean hits 3-month low on weak soymeal exports

Futures contracts of all components of the edible oil basket declined on domestic exchanges.

The most active March contract of soybean on NCDEX hit the 3% lower circuit and fell to an over three-month low of 3,912 rupees per 100 kg due to a sharp fall in soymeal exports and weakness in global demand for edible oils following the outbreak of coronavirus in China.

The March contract of refined soyoil on NCDEX fell due to weak demand in both domestic and global markets.

Monday, soybeans closed 2 1/4 cents higher in the front months. Soybean meal futures were $2.10/ton higher, while soy oil futures fell 35 cents.

The USDA Export Inspections report from this morning showed 603,852 MT of soybeans were shipped on the week ending 02/06. Exports from the same week last year were 47.53% higher. MYTD exports just topped 1 billion bushels with 27.218 MMT, which is 4.489 MMT above last year’s pace.

China was the top destination for the week’s shipments with 22.41% of exports headed for the country. Brazil’s Ag Rural said harvest there is 10% below their average pace. As of Thursday only 16% of the soybean crop was harvested.

Analysts surveyed ahead of the February WASDE report pegged soybean production from South America at 123.7 MMT in Brazil and 53.1 MMT in Argentina. Those would be increases to production for both nations, relative to the January USDA numbers.

The increases from South America push World carryout higher with the average estimate at 97.3 MMT of soybeans, about 600,000 MT higher than January WASDE. The average estimate for US ending stocks is 448 mbu (down from 475 mbu in Jan).