IGC estimates lower soy harvest 2015/16 the previous year, but better care
The International Grains Council (IGC) has updated its July estimate for the soybean market. In the recent August edition, the world harvest is corrected by 2015/16 to 318 million tons of soybeans for the marketing year slightly upward, remains but a little below the previous year's result.
Critical to the improvement was the higher classified U.S. crop with an estimated profit of 105.5 million tonnes (previous year 108 million tonnes). The IGC estimates comes relatively close to recent forecasts by other institutions. The reason lies in the currently weather beneficiaries Blüh and pod formation phase in the month of August.
The figures from the previous year have been increased on the demand side , little. In the biggest consumption area with almost 30% share of world consumption rising China the numbers only around 3 million tonnes as compared to previous increase amounts from + 6 to + 8 million tonnes per year. The reasons of the Chinese currency in the reduced number of pigs of China as well as the reduced purchasing power as a result of the devaluations.
The record crop in South America has resulted in a high volume of soy and high surplus stocks. The upcoming second largest U.S. soybean crop will hold high the offer with the result that the final stocks increase again slightly.
Next spring an increase in the acreage is announced by the South American countries with average earnings expectations the IGC predicted an again increasing soybean harvest volume at 98 million tonnes (previous year 96 million tonnes). For Argentina, the expectations will be back on amounts of 57 million tonnes (previous year 61.4 million tonnes) screwed back in the upper midfield.
However, several obstacles hinder this perspective. The unpredictable El Niño weather could draw a thick line through the Bill. The question is also entitled, whether and to what extent in yielding soybean prices, stock will have to order the willingness of more soy land,.
The supply situation on the soy market represents quite cheap with unusually strong rise end stocks of in recent years. The soy complex determines the well supplied oilseed market and the market for vegetable oils for a significant proportion.
The prices for all products in this sector are under severe price pressure, originally triggered by the highly unusual course of crude oil. Pronounced price declines are to find as a result in the oil sector, while in the sector of oil shot came from a previously moderating effect of the feed. But Springs must have this product line now also significantly.
For international trade , the exchange rates of the dollar, the euro, real and the Chinese currency play a substantial role. Currently, a lot of uncertainties here reigns over direction and scale of the development. Possibly, also changes in Argentine export policy could play a role depending on the outcome of the presidential election.
ZMP Live Expert Opinion
The average supply situation in the entire oilseed sector with a focus on the fields of soy and palm oil sector is built up through several bumper harvests in recent years. The development of demand has taken recently not to the same extent. High end stocks are on hand to ensure that remaining production risks can be caught quite well. The courses are under pressure. The crude oil price plays a crucial role in the background. Uncertainties about the further development of exchange rates affect international trade without precise knowledge of direction and magnitude of possible disruption of trade.
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