The soy complex was clearly under bearish pressure this week. Soybeans fell on the CBoT on four out of five trading days, with the most traded November contract reaching its lowest level since April at below 990 US cents/bushel on Friday. The main drivers of the losses were favorable weather conditions in the US growing regions with abundant rainfall and moderate temperatures. In combination with an increase in the USDA rating to 70 percent "good/excellent", there are increasing indications of a high-yielding harvest. The strengthening of the US dollar as a result of international trade agreements also put additional pressure on prices. Argentina's announcement to reduce export taxes on soybeans and soybean products also weighed on the market due to the threat of competition on the global market. China's continued reluctance to purchase US soybeans also caused uncertainty - the country is once again missing from the current USDA export report as an official buyer. However, some traders suspect that at least some of the "unknown" orders could go to the People's Republic. Meanwhile, canola was extremely volatile. In Winnipeg, there were strong fluctuations in some cases, with upward and downward movements occurring almost on a daily basis. While firm soybean oil prices provided temporary support, weak export prospects and Australia's conspicuous pricing strategy increasingly weighed on sentiment. According to observers, institutional investors also helped determine the direction of prices in this lackluster environment. The rapeseed market on Euronext Paris was unable to escape the downward maelstrom and steadily lost ground over the course of the week.
ZMP Live Expert Opinion
The mood on the oilseed market remains clearly characterized by bearish influences. Positive weather models and the strong dollar are weighing on soybean prices in particular. China's reluctance to export is adding to the uncertainty. If the good stock trend is confirmed, the seasonal downward trend could continue well into August. The canola market remains difficult to predict, mainly due to speculative capital movements and inconsistent weather conditions in Canada. Without fundamental turning points, a sustained recovery remains unlikely for the time being.
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