Prices in the soy complex were heavily influenced by macroeconomic and geopolitical developments last week. While the USDA quarterly report for soybeans was rather bullish (stocks were below expectations at 316 million bushels), bearish forces ultimately prevailed. The current US harvest developed according to plan, but exerted sustained pressure on prices. Added to this was the subdued export momentum: the weekly inspection figures were below the previous year's level and fell short of expectations. The political conflict surrounding Argentina's export tax waiver also dominated market activity. The short-term release of billions in exports, particularly to China, has put US traders at a disadvantage. The angry reactions from the US government underline the explosive nature of this development. On the supply side, Brazilian analysts reported an unusually early start to the new soybean season. Despite varying estimates, the trend remains clear: sowing is well ahead of last year, boosted by good weather conditions.
There was a lack of sustained impetus in the soybean meal market. Prices were volatile, but reacted sensitively to the weak environment. Soybean oil prices suffered from the lack of publication of important oil and fat statistics as a result of the US shutdown, which created additional uncertainty.
On the canola market, the focus was on rapid harvest progress and weak export demand. Despite lower-than-expected production estimates, prices continued to fall. Rapeseed on Euronext was also only able to escape the downward pressure temporarily and hovered at a low level at the end of the week.
ZMP Live Expert Opinion
Despite initially bullish USDA figures, the soybean market was unable to break away from the weak underlying sentiment. The macroeconomic burdens and political tensions surrounding Argentina, which is regaining important market share in the short term thanks to the export tax waiver, were too dominant. In the USA, the shutdown is causing an information deficit that is creating uncertainty. The early sowing in Brazil points to a large harvest, which suggests additional supply in the medium term. The situation for soybean meal also remains tense as long as no new export impulses emerge. Harvest pressure on the canola market is likely to remain a burden in the short term, even if production estimates for Canada are below expectations. Overall, price pressure remains high, especially as the important buyer side, above all China, is reacting hesitantly due to the high tariffs.
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