Shipping to Asia
According to the Illinois Soybean Association (ISA), Asian countries, led by Indonesia are relying on shipping containers to transport the soybeans which they have purchased. This method of transport has increased by over 40% since 2015 to 2.8 million metric tonnes. Soybeans shipped in containers to Asia are also expected to rise by around 18%, therefore making it 3.3 million metric tonnes.
This method of shipping has made it easier for smaller countries to buy U.S soybeans. It minimises their inventory investment as well as other benefits such as quality prevention and shorter delivery times without going through the main shipping channel. This also has benefits for the U.S as it means idle sitting containers can then be used to ship the soybeans, henceforth, freeing up space in their shipping yards.
Price for week 16
Due to Easter holidays, trading ended a day earlier this week. At the start of the week, soybean started trading at 898.6 cents. 2 days later however, it had plummeted to 879.0 cents. By the close of trading this week it ended up at 879.0 cents, 19,6 cents down from the previous week.
Sources:
https://www.ilsoy.org/press-release/asia-shows-increasing-demand-container-shipping-us-soybeans
https://www.cmegroup.com/trading/agricultural/grain-and-oilseed/soybean_quotes_globex.html?optid=320
Monday, April 22, 2019
Sunday, April 14, 2019
Week 15 - Argentina and Brazil raise soybean harvest estimates
Weekly Price update
Soybean May 19 futures contract has not had the best of weeks. The price settled at 895.2 cents, down by 7.2 cents from open on Sunday 7th April. There has been largely bad weather in the US Mid-West with snowstorms limiting the movements of crops. Although analysts have mentioned that although this weather may not be good for soybeans, it may benefit other grains such as wheat. Currently farmers are struggling to make a decent profit on crops as they have too much old stock and a decrease of demand from China is making it harder to move the stock.
Harvest estimates for Argentina and Brazil
Over the past week, both Argentina and Brazil has it's forecast for the harvest of soybean. The Buenos Aires Grains Exchange raised its estimates to 55 million tonnes, a day after the Rosario exchange increased its estimate for the crop. This may affect trade in the U.S as it is generally slightly cheaper to buy from Argentina and Brazil that the U.S, meaning the U.S will have to hope to be rid of the tariffs between them and China.
Sources:
https://www.cnbc.com/2019/04/12/reuters-america-grains-corn-and-soybeans-set-for-weekly-drop-on-slow-exports-and-big-latam-crops.html
CME - https://www.cmegroup.com/trading/agricultural/grain-and-oilseed/soybean_quotes_globex.html
Soybean May 19 futures contract has not had the best of weeks. The price settled at 895.2 cents, down by 7.2 cents from open on Sunday 7th April. There has been largely bad weather in the US Mid-West with snowstorms limiting the movements of crops. Although analysts have mentioned that although this weather may not be good for soybeans, it may benefit other grains such as wheat. Currently farmers are struggling to make a decent profit on crops as they have too much old stock and a decrease of demand from China is making it harder to move the stock.
Harvest estimates for Argentina and Brazil
Over the past week, both Argentina and Brazil has it's forecast for the harvest of soybean. The Buenos Aires Grains Exchange raised its estimates to 55 million tonnes, a day after the Rosario exchange increased its estimate for the crop. This may affect trade in the U.S as it is generally slightly cheaper to buy from Argentina and Brazil that the U.S, meaning the U.S will have to hope to be rid of the tariffs between them and China.
Sources:
https://www.cnbc.com/2019/04/12/reuters-america-grains-corn-and-soybeans-set-for-weekly-drop-on-slow-exports-and-big-latam-crops.html
CME - https://www.cmegroup.com/trading/agricultural/grain-and-oilseed/soybean_quotes_globex.html
Sunday, April 7, 2019
Week 14 - U.S. Soybean Futures Rise
U.S. soybean futures rise over 1% weekly due to trade talks optimism and USDA report.
Chicago Board of Trade (CBOT) crop futures traded higher in the trading week ending on April 5, with soybeans adding over 1 percent, as the oil seeds were boosted by optimism over trade talks between the United States and China and also USDA report. May soybeans were up 14,75 cents, or 1,67 percent, to settle at 8,99 dollar per bushel.
China and the United States concluded in Washington the ninth round of high-level economic and trade talks which ran from Wednesday to Friday. China has been the world's top soybean buyer. Any positive development concerning the trade talks between the two sides will boost U.S. soybean prices. Also, in other news, the USDA projects soybean imports at 4 million tonnes in 2019-20, up from 3,5 million tonnes in 2018-19. Most of the imports will come from the United States, according to the USDA.
These optimistic news from both sides surge soybean price a little bit and ended up having a nice day. The bull spreads are working and once announcement of a trade deal between the U.S./China, then we could see the funds start to buy back some of their huge short position in soybeans. But at the moment, it will take a miracle to rally soybeans above $9,10 against May futures because there is still have huge supplies hence, the market will be reluctant to rally too much.
Now, as trade talk is almost at the final stage, should most Farmers Hedge now or consumers should rather buy now? Well, all things being equal, we may recommend consumers to buy now because it look like something positive will come out of the Trade Talk which will soar prices.
Sources:
https://www.world-grain.com/articles/11890-egypt-soybean-imports-surging
http://www.xinhuanet.com/english/2019-04/07/c_137956011.htm
Chicago Board of Trade (CBOT) crop futures traded higher in the trading week ending on April 5, with soybeans adding over 1 percent, as the oil seeds were boosted by optimism over trade talks between the United States and China and also USDA report. May soybeans were up 14,75 cents, or 1,67 percent, to settle at 8,99 dollar per bushel.
China and the United States concluded in Washington the ninth round of high-level economic and trade talks which ran from Wednesday to Friday. China has been the world's top soybean buyer. Any positive development concerning the trade talks between the two sides will boost U.S. soybean prices. Also, in other news, the USDA projects soybean imports at 4 million tonnes in 2019-20, up from 3,5 million tonnes in 2018-19. Most of the imports will come from the United States, according to the USDA.
These optimistic news from both sides surge soybean price a little bit and ended up having a nice day. The bull spreads are working and once announcement of a trade deal between the U.S./China, then we could see the funds start to buy back some of their huge short position in soybeans. But at the moment, it will take a miracle to rally soybeans above $9,10 against May futures because there is still have huge supplies hence, the market will be reluctant to rally too much.
Now, as trade talk is almost at the final stage, should most Farmers Hedge now or consumers should rather buy now? Well, all things being equal, we may recommend consumers to buy now because it look like something positive will come out of the Trade Talk which will soar prices.
Sources:
https://www.world-grain.com/articles/11890-egypt-soybean-imports-surging
http://www.xinhuanet.com/english/2019-04/07/c_137956011.htm
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