Soybean

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

The IGC’s monthly report shows 17/18 world soybean ending stocks at 42 MMT, down 3 MMT from February on a reduction in production.

Futures contracts of most components of the edible oil complex, barring soybean, fell on domestic exchanges. The most-active April contract of soybean rose marginally on the National Commodity and Derivatives Exchange tailing strength in key contracts on the Chicago Board of Trade. Paring gains from the previous session, the April contract of mustard on NCDEX traded 0.5% lower due to a rise in arrivals of fresh crop and lukewarm demand from oil millers.

Futures contracts of components of the edible oil complex traded on a mixed note on domestic exchanges. While, soybean and mustard ticked higher, crude palm oil and refined soyoil drifted lower.The most-active April soybean contract on the NCDEX traded nearly 1% higher, tracking key contracts on the Cbot.

Prices of soybean rose in Indore because of improved demand from crushers of the oilseed for production of meal. Demand from the crushers were up due to a long weekend. The most active April futures of soybean on the NCDEX were unchanged.

The revised production prospects for Argentine soybeans were down significantly from previous projections. The USDA forecast 2017-18 production at 47 million tonnes, down 7 million tonnes, or 13%, from the previous month’s projection and off significantly from the previous two years: 19% lower than the 2016-17 outturn of 57.8 million tonnes and 17% lower than the 2015-16 outturn of 56.8 million tonnes.

NCDEX on marked 11,130 tn soybean for staggered delivery in the March contract.

Prices of soybean rose in Indore, Madhya Pradesh, due to a fall in arrivals of the oilseed and higher demand for soymeal from the poultry feed industry. Improved demand from domestic oil millers and crushers is also seen supporting soybean prices. Strong demand for soybean in the US is seen supporting prices on CBOT, boosting prices in the domestic market.

Prices of soybean rose in Indoredue to a slight increase in demand from crushers, and tracking gains on CBOT. Strong demand for soybean in the US is seen supporting prices on CBOT. Demand for soymeal from the poultry sector is pushing seed prices higher.

Soybean prices in Indore were down because of lower demand for the oilseed from crushers for production of its derivatives, particularly soymeal. The most active April futures on the NCDEX were down 2.4%. Rajfed announced to purchase mustard, chana, wheat at support price.

China’s 2017/18 soybean imports are expected to climb above 100 million tonnes. China bought 93.5 million tonnes of soybeans in 2016/17.

Soybean prices in Indore fell because of lower demand from crushers who produce soymeal. Lower meal demand is seen pushing prices of the oilseed lower. The most active April futures on the NCDEX, however, rose 2.4%.

Soybean futures edged higher, rebounding from a more than two-week low touched earlier in the session, though gains were capped by fears of a potential fall in demand for North American supplies by China as a trade war escalates. The most active soybean futures on the Chicago Board Of Trade were up 0.1 percent to $10.40-1/2 a bushel.

Prices of soybean were down in Indore, Madhya Pradesh, as demand from millers remained sluggish. India’s soymeal exports in February declined 64.5% on year to 73,816 tn. Lower demand from crushers was weighing on soybean contracts. The most active April futures contract was down 1.1% at 3,808 rupees per 100 kg on the NCDEX.

The value of Argentina’s soy export sales in 2017 were down by 10.2% versus 2016, while wheat sales doubled between 2015 and 2017. Total 2017 export soy sales, comprising sales of meal, oil and beans, amounted to $15.54 billion, the lowest value recorded in the last four years. Soybean meal sales accounted for $9.05 million, of which nearly a third of that was sold to the EU. Soybean oil sales came in at $3.73 billion, with just under half going to India, while soybean sales were $2.73 billion, of which 88% was picked up by China.

Soybean prices in Indore fell because demand was sluggish as prices have risen after the government raised import duty on palm oil and refined bleached deodorized palmolein. Weakness in soybean contracts on CBOT also weighed on domestic prices. The most-active April contract on NCDEX was down 35 rupees.

Futures of soybean and refined soyoil traded over 1% higher on the National Commodity and Derivatives Exchange because of rise in demand in wholesale markets. Expectation of a hike in import duty on soyoil, in line with palm oil, also boosted the sentiment on the Indian exchange.