Soybean

Chinese companies are expected to cancel most of the remaining soybeans they have committed to buy from the United States in the year ending August 31 once the extra tariff on US imports takes effect. China has yet to take delivery of more than 1.1 million tonnes booked for the current marketing year, last week that China had resold about 123,000 tonnes of committed deliveries to Bangladesh and Iran.

Soybeans slid for a fourth consecutive session on headwinds from the ongoing U.S.-China trade dispute, while corn prices edged higher. Soybeans fell 0.2 percent to $8.67-1/2 a bushel.

Soybean prices in Indore were up because of a decline in arrivals and worries of another break in monsoon. In the benchmark market of Indore, prices of soybean were up 50 rupees at 3,600-3,650 rupees per 100 kg. Arrivals of soybean in Madhya Pradesh were pegged at 30,000 bags (1 bag = 100 kg) today, lower than 40,000 bags. Lower acreage of soybean in the 2018-19 (Jul-Jun) kharif season so far is also seen supporting prices.

India kharif oilseed sowing so far 1.46 mln ha vs 2.60 mln year. This break in the monsoon current is likely to be a good opportunity for farmers to complete sowing operations.

Imports of soybean by China are expected to rise to 100.5 mln tn in marketing year 2018-19 (Oct-Sep), up by 3.5 mln tn from the previous year, because of a growing demand for the protein meal. In 2018-19, the production of the oilseed in the country is seen 15.2 mln tn, up by 1.1 mln tn from the USDA’s June forecast of 14.1 mln tn. Marketing year 2018-19 total oilseed consumption to reach 164.3 mln tn based on the continued growth of the animal husbandry industry’s demand for protein meal. The country imported 60.3 mln oilseeds Oct-May compared with 59.2 mln tn in the year-ago period.

Around 73% of soybean crop in the US was in ‘good’ or ‘excellent’ condition in the week, unchanged from the previous week but 7 percentage points higher than the corresponding period last year.

With domestic production declining and consumption on the rise, Turkey has become one of the world’s leading importers of soybeans and soybean meal. USDA forecast 2018-19 soybean planted area and production at 26,000 hectares and 95,000 tonnes, respectively. Total soybean imports during the first eight months of marketing year 2017-18 were 1.6 million tonnes, up about 28% compared to the same period last year due to lucrative crushing margins. The leading supplier is Ukraine with 520,000 tonnes, followed by the United States with 410,000 tonnes, up about 55% from the previous year due to attractive prices relative to other suppliers.

The August contract was flat and closed the day at $8.73. The November contract added 1.5 cents to end the day at $8.89 per bushel. Markets have largely shrugged off current concerns about China and the trade war.

Soybean futures on NCDEX rose after China said it will cut import tariffs on Indian soybean. The most active July contract on the domestic bourse was up 0.7% at 3,460 rupees per 100 kg. In Indore, the benchmark market, prices of soybean were up 25 rupees at 3,475-3,525 rupees per 100 kg.

Soybean futures on NCDEX rose after China said it will cut import tariffs on Indian soybean. The most active July contract on the domestic bourse was up 0.7% at 3,460 rupees per 100 kg. In Indore, the benchmark market, prices of soybean were up 25 rupees at 3,475-3,525 rupees per 100 kg.

Paraguay exporters shipped a total of 4.24 million mt of soybean in the first five months of the year.

A forecast by the Department of Agriculture shows an increase in production could drive Brazil to pass the U.S. in soybean exports. Brazil is already the leading global producers of soybeans, and the second-largest exporter of the crop. USDA says Brazil’s soybean output is currently forecasted to exceed that of the United States by the 2018/19 marketing year. The milestone would represent a 22 percent increase in production over the last three years for Brazil. Almost all the increased production has made its way to the export market, according to USDA, which has risen 34 percent over the same time. In addition to significant growth in sales to China, Iran and Russia, domestic conditions in 2018 have also driven up exports. In May, Brazil’s soybean shipments reached a record high, despite a trucker strike in the nation and stalled deliveries to ports.

Hundreds of thousands of U.S. soybean farmers are rethinking strategy because of a growing fear that a potential trade war with China would cripple the industry. The Trump administration announced $50 billion in tariffs on Chinese goods for “unfair trade practices” involving intellectual property and American technology, and China responded with its own trade threat – $50 billion in tariffs on U.S. goods, including soybeans. Soybean farmers say they are already feeling the pinch. The back-and-forth has caused significant price drops for soybeans this year, just months ahead of harvest season. China imported 60 percent of U.S. soybeans exports in 2017, according to the American Soybean Association (ASA). The ASA, which represents 300,000 soybean farmers, noted a $6 billion price drop for the 2018 crop, which will be harvested later this year.

One country that could indirectly benefit from the intensifying US-China trade war is Brazil, which finds itself in a strategic position to increase its market share of soybean exports to China. China is expected to import 100 million mt of soybeans this year, up from 95 million mt in 2017. The US accounted for 33 million mt, or just over a third, of the 2017 total. With US soybeans now in line for a 25% tariff, Chinese buyers are likely to shift their interest to the South American region, which accounts for nearly half of global soybean production. The latest estimate for the 2017-2018 Brazilian soybean crop is up to 119 million mt, compared to last year’s harvest of 114 million mt. Of this 51 million mt was exported to China, up 33% up from 2016. The other major South Americn producer, Argentina, is not in much of a position to offer competition this year. Soybean production there has been hammered by poor weather conditions that mean its crop is expected to be the lowest in a decade.This leaves the field open to Brazil as the main supplier of soybeans and at more competitive prices than the other options available on the market. Meanwhile, the weakness of the Brazilian currency enhances farmers’ margins when compared with the more expensive US grains that, despite the drop in prices caused by the US-China trade dispute, are still not as attractive.

Argentina crushed 3.66 million mt of soybeans in May, down 19% from the 4.52 million mt crushed in May 2017.

Soybean prices in Indore rose because arrivals of the oilseed fell, and as area under the oilseed is seen lower. The area under soybean in the country was at 212,400 ha as of Thursday, down 59% from a year ago. In Indore, the benchmark market, prices were up 50 rupees at 3,450-3,500 rupees per 100 kg. arrivals of soybean in Madhya Pradesh were estimated at 30,000-40,000 bags (1 bag =100 kg), down 4,000-5,000 bags.

CBOT soybean is continuing with its bearish tone ended price mixed tone. Favourable US crop weather and increasing trade tension between US & China pressurising the market. China is looking for more imports of soybean from Paraguay and Uruguay as Brazil cannot supply the increased demand.As tariffs will raise the overall cost of imports from the USA, so Brazil premiums for soybean climbed over 7% as trade tension between two countries increasing demand from Brazil. However, the USA’s high temperatures resulted in a slight decline in the soybean rating. The condition of the 2018 U.S. soybean crop declined 1% last week to 73% rated good to excellent. Seven states indicated that the soybean condition improved last week, nine states reported that the soybean condition declined last week, and two were unchanged.

A growing trade war between the United States and China is weighing heavily on American soybean prices, which have fallen sharply from the spring highs. The weather in the U.S. Midwest is co-operating and the amount of soybeans in good to excellent shape at 74 percent is much better than last year at this time and better than the 10 year average. It is hard to keep up with conflicting developments in this row between the Trump administration and China. The spring high in new crop November soybeans was reached May 25 and the price had fallen since then by almost 12 percent.

NCDEX Jul Soybean closed lower due to profit booking by the market participants on expectation of good sowing. However, there expectation good physical demand due to anticipation of higher domestic crushing of soybean after government increase customs duty on crude as well as refine soy oil to 35% and 45% respectively. Prices have been under pressure on forecast of normal rains and lower meal exports data from both SEA and SOPA is weighing on prices this month. Soybean acreage till last week is 56 % higher than at 50,000 ha as compared to the last year acreage. Bangladesh, one of the largest importers of soymeal from India, reduced the import duty to nil which may result into tough competition for the country from South American peers in soymeal exports to Bangladesh.

Nearby soybean futures on the Chicago Board of Trade closed fractionally higher as the market consolidated a day after the front contract fell to a 9-1/2 year low. CBOT July soybeans settled up 1/2 cent at $8.89-1/2 per bushel while new-crop November ended down 1/2 cent at $9.10-1/2. CBOT July soymeal fell $1.30 at $333.20 per short ton. CBOT July soyoil rose 0.52 cent at 29.37 cents per pound. Rebound in soybeans capped by ongoing trade tensions between the United States and top global soy buyer China. Also, forecasts for beneficial Midwest rains this week hang over the market, bolstering early prospects for a big US crop. Ahead of the US Department of Agriculture’s weekly export sales report on Thursday, traders expect the government to report US soybean sales at 400,000 to 1,000,000 tonnes (old and new crop years combined).