Lift for US soybeans but weather remains a concern for all oilseeds markets: UK analysts
The latest USDA supply and demand estimates (WASDE) indicated significant cuts to both soybean production figures and soybean stocks estimates, and, last Friday [October 11], Chicago soybean futures (Nov-19) closed the week at $343.89/t, up $7.63/t from Monday [October 7]. Managed funds saw a turn to net-long positions in Chicago soybeans at 1%, a first since February, noted the analysts.
The reported breakthrough in the China-US trade war could also lift the US soybean markets, but AHDB reckons there is still a good deal of skepticism from experts on whether, as part of the accord announced last week, China would significantly step up purchases of US agricultural commodities.
However, it would seem the Chinese are back buying US soybeans despite trade war tensions.
Weather remains a concern for all oilseeds markets, noted the analysts. US northern states are currently heavily affected by snowstorms, with large volumes of snow delaying ongoing harvests and cold temperatures slowing soybean maturity rates, they said. In Brazil, recent dryness has been keeping soybean sowings at bay. Recent planting estimates (October 8) put Brazilian progress at just 3%, the slowest rate in six years, as per AgRural data.
Imports of rapeseed into the EU have hit a record 2Mt so far this season, with Ukraine as the main origin, but large volumes are still required, with limited export origins, said AHDB.
Global grain surplus lowered
The combination of Northern and Southern Hemisphere delays, and further cuts to Australian production forecasts have reduced the size of the grain surplus in 2019/20, found the AHDB.
The Southern Hemisphere has remained dry with little rain predicted, delaying maize planting in Argentina and further downgrading the condition of the wheat crop, reported the analysts.
“Further cuts to Australian wheat production, and increasingly poor outlooks for Southern Hemisphere [wheat] production have been reducing the size of the forecast global surplus.
“Maize planting in Argentina by October 9 was 16 percentage points behind average, with a reducing moisture condition.”
In terms of the US maize crop, they said that developmental delays mean that, with just 58% of the US crop now mature, and 27 percentage points behind average, only 15% of the crop has been harvested.
“With adverse weather and snowfall in the northern plains, harvest will be hard-pressed to catch up, providing support to the underlying maize market.”
Additionally, the harvest of US spring wheat had progressed by just 1% last week with 9% left still to cut as at October 6, found the market report. “This time last year, the US wheat harvest had been completed for three weeks.”