Soybean

The forecast is up from Agrural’s view last month of 117.9 million mt and from last year’s record harvest of 114.4 million mt. The higher production is based on a planted area of 34.7 million hectares with an average yield of 3.4 mt/ha.

Soybean area and production levels for marketing year (MY) 2018/19 -July to June) in Bangladesh are projected to increase to 80,000ha and 152,000 tonnes respectively, due to a switch from Boro rice production. Soybean planting area and production estimates for MY 2017/18 are lowered to 60,000ha and 114,000 tonnes due to unsuitable conditions for planting at the optimal time, and the shift of land to Boro rice cultivation due to an expected higher harvest price. Meanwhile, MY 2018/19 soybean and soymeal imports are estimated to increase to 1.1 million tonnes and 550,000 tonnes respectively, to keep pace with demand in the feed industry, as well as growth in the livestock and fisheries sectors.

Soybean prices rose in Indore because of demand from crushers amid lower arrivals. Strong cues from soybean contracts on CBOT also helped domestic prices higher.

Prices of soybean fell in the benchmark market of Indore, Madhya Pradesh, due to a rise in supply. On NCDEX, the most-active May contract of soybean was trading down 0.3% from the previous close.

Prices of soybean fell in Indore, Madhya Pradesh, owing to lacklustre demand from domestic oil millers and crushers. A rise in arrivals of the oilseed also weighed on prices.

Futures contracts of soybean on NCDEX rose around 3% and hit a one-month high of 3,880 rupees per 100 kg, tracking gains in parent contracts on CBOT. Soybean contracts on CBOT rose over 1% on expectation of lower acreage under the crop in coming season. Prices of the oilseed were also up in the benchmark market of Indore, Madhya Pradesh.

Chinese restrictions on imports of soybean from the United States will harm the Chinese people more than US producers. Imposition of China duties on soybean import would cause an annual economic loss for the US between 1.7 billion USD and 3.3 billion USD. China buys nearly 60% of soy products that are traded globally, with over 30% of soybean imports coming from the United States.

Brazil’s soybean harvest has reached 71% up six percentage points in the week and just short of last year’s figure of 74% at this time of the harvest. In the North/Northeast, the harvest of the 2017/18 harvest reached 25% in Bahia, 50% in Maranhao, 56% in Tocantins, 40% in Piaui, 27% in Para and 97% in Rondonia.

The country’s soybean imports this year are likely to touch a record high of around 1 lakh tonne and this trend is expected to continue. India produced around 83-85 lakh tonne of soybean at the end of 2017, down from more than 110 lakh tonne a year ago. According to market sources, deals have been signed to buy up to 100,000 tonne of soybean mainly from Ethiopia and Benin in Africa. India has concessional import duty agreements with these countries. Deals have been reportedly signed at $410-520 a tonne for delivery to Indian ports.

US acreage for soy in 2018 to fall 1% 89 million acres. US Soybean stocks beginning of March 2.107 billion bushels. USDA private sale of 266,500 MT of soybeans to unknown destinations for 17/18 delivery. Export Sales report showed just 317,511 MT in old crop sales. 69,717 MT for new crop sales. Soy meal sales 184,052 MT, with soy oil at 34,589 MT.

Brazil is expected to export a record 72 million tonnes of soybeans this year, up from 68 million tonnes last season as a drought damaged Argentina’s grains and China’s potential retaliation of U.S. protectionism caused Brazil soybean premiums to widen in relation to prices in Chicago. Farmers will produce almost 119 million tonnes of soybeans this season as yields grew in key regions and in spite of a lack of rains in the south, which damaged the crop in states like Rio Grande do Sul.

Crude palm oil futures on the Bursa Malaysia Derivatives settled flat, as gains due to strength in soyoil contracts on CBOT were offset by a firm ringgit against the dollar. The most-active June contract of crude palm oil on the Malaysian bourse settled at 2,431 ringgits (40,702.11 rupees) per tn, down 3 ringgits from the previous close.

Bangladesh is likely to produce 152,000 tn soybean in the year 2018-19 (Jul-Jun), up 33%. The rise in soybean production in the country is attributed to favourable weather conditions, expected average yield and a rise in acreage.

Soybean prices fell in Indore, despite a decline in arrivals, due to weak demand before the end of the financial year.

Chicago soybeans rose on Monday as concerns over trade tensions between China and the United States eased, shifting attention back towards crop damage in Argentina. Corn also firmed, while wheat edged lower after touching a one-week high as investors assessed the impact of rain in parched US growing belts. The Chicago Board of Trade’s most-active soybean contract gained 0.5 percent to $10.33-1/2 a bushel after hitting a one-week peak of $10.40-1/4. Soymeal, of which Argentina is the world’s biggest exporter, was up 1 percent at $381.8 a tonne.

Brazil’s massive soybean harvest has reached 65% of the expected planted area, up seven percentage points on the week, but behind the 68% harvest level of last year.

Chinese imports of US soybeans fell by 25% in February compared with the same month a year earlier as Brazil’s bumper crop displaced US farmer supply. China imported 5.42 million mt of soybeans in February, with the US taking a 3.345 million mt market share versus 1.75 million mt from Brazil.

Soybeans For 2017-18, supply is estimated at a record 8.3 Mt, up from last year’s 7.5 Mt due to sharply higher production. Exports are forecast at a record 5.6 Mt, up from 4.4 Mt in 2016-17 on ample domestic supplies, a wide basis and the discount of the Canadian dollar against the US dollar. Domestic processing of soybeans is forecast to fall marginally from last year to 1.80 Mt, under pressure from weak soymeal prices. Carry-out stocks are projected at 0.38 Mt. Soybean prices are forecast to fall to $420 to $450/t versus $454/t for 2016-17. For 2018-19, planted area is forecast to rise by 2%, to a record 3.0 Mha, due to attractive returns in comparison to alternate crops. Production is forecast to rise slightly to a record 8.1 Mt due to higher area and higher average yields, which are based on a 5-year average. Total supply is forecast to increase by about 5% and set a new record of slightly over 8.7 Mt. In turn, this is expected to support record exports of 6.0 Mt to a diverse group of countries. Domestic processing is forecast to rise marginally to 1.9 Mt, slightly under the record pace set in 2015-16. Carry-out stocks are forecast to fall to 0.33 Mt from the 0.38 Mt anticipated for 2017-18. Soybean prices are forecast down slightly to $415 to 455/t under pressure from pressured US prices and a stable Canadian dollar-US dollar exchange rate. For 2018-19, the USDA forecasts US soybean production to decline by 2%, to 4.88 bln bu, due to a marginal decline in planted area, a 0.3 million (mln) acre increase in abandonment and a 0.6 bu/ac decline in yields from 2017-18. Supplies of soybeans are forecast to rise to a record 4.88 bln bu as the drop in output is more-than offset by a sharp rise in carry-in stocks and stable imports. Domestic processing is forecast to rise by 30 mln bu, to 1.98 bln bu, on stronger demand for soymeal while exports increase by 200 mln bu, to 2.3 bln bu, on a combination of rising world demand and anticipated production shortfall in the South American harvest. Ending stocks are forecast to tighten up slightly for the 2018-19 crop year while the average farm gate price decline by 5 cents/bu, to US$9.25/bu, under pressure from the strong US dollar. Over the long run, the USDA is forecasting US soybean plantings to exceed corn, at 91 to 92 million acres, as growing world and domestic demand supports prices and generates higher producer returns compared to corn and wheat. The growth in world demand will be driven by China, which is projected to import 143 Mt of soybeans by 2026-27, or about 36% of the approximately 400 Mt of soybeans grown world-wide. The US is projected to respond to this growth in demand by producing 4.8 billion bushels (about 131 Mt) of soybeans compared to the 4.4 billion bushels grown in 2017-18. At the world level, world trade in soybeans is projected to expand by 30%, to 205 Mt, of which about 70% will be heading to China. Three countries, Brazil, the US and Argentina, are projected to account for about 87% of the world exports in soybeans over the next 10 years. Brazil is projected to capture most of this expansion as soybean shipments rise by 45%, to about 96 Mt. The US is projected to export to 68 Mt by 2027-28 resulting in a decrease in market share from 40%, to 33% of world soybean trade. Argentine soybean exports are forecast to rise by 62%, to 14.1 Mt, mostly to China, despite the continuation of differential export taxes which favour the domestic processing of soybeans over exports of the raw seed. The USDA projects Canadian exports of soybeans to rise to 8.1 Mt by 2027-28 from 6.1 Mt in 2018-19. World trade in soymeal trade is forecast to rise by 18% to 82 Mt, about 40% of the world trade in raw soybeans, by 2027-28 on support from continued growth in livestock production and movement towards modern feed rations. Many countries are constrained in their ability to increase domestic oilseed production, thus rely on the international marketplace. The EU is projected to remain the world’s largest importer, at about 20 Mt per year, while Southeast Asia, North Africa, the Middle East and Latin America are projected to increase soymeal imports. World import demand for soyoil is also projected to grow by 27%, to slightly over 15 Mt by 2026-27, due to rising food and industrial use. Growth in world trade in soyoil is expected to be constrained by palm oil, of which production is projected to rise to about 80 Mt by 2026-27, according to the OECD-FAO. Argentina, Brazil, the US and the EU account for 80% of the world’s exports of soyoil and by 2027-28, Argentina, Brazil and the US are projected to account for 48%, 18% and 8% of the world’s exports in soyoil. Over the medium term, gains in US prices for all oilseeds, protein meals and vegetable oils are projected to be muted compared to world prices due to the strength of the US dollar. The US farmgate price for soybeans rises slowly and steadily from the US$9.30/bu projected for 2017-18, to US$9.80/bu for 2027-28. By contrast, the modern day low price for soybean prices at the farm-gate was set in 2015-16 at US$9.23/bu versus the modern day high of US$14.42/bu, which occurred in 2012-13. Over the next decade soymeal prices are projected to rise from US$320/st in 2017-18 to US$350/st in 2027-28. US soyoil prices are forecast to rise by US 4.7 cents/lb from 44.5 cents/lb to 49.2 cents/lb over the next 10 years