The soy complex had a weak start to the week, characterized by losses in soybeans and soybean meal on the CBoT. Reports from Argentina, where the condition of soybean stocks continued to deteriorate, had a particularly negative impact. Although the proportion of areas rated good/excellent was still above the previous year's low level, the continued downward corrections fueled concerns about yield losses. In addition, the US export figures were disappointing, falling short of both the previous year's figure and the usual pace of sales. The market stabilized temporarily in the middle of the week after US soybean processing fell short of expectations in December, but was up on a monthly and annual basis. Declining EU imports were also noted, but without providing any clear impetus.
The mood turned clearly positive towards the end of the week. A post by US President Donald Trump on allegedly higher Chinese import targets for US soybeans sparked a strong rally that affected soybeans, soybean meal and soybean oil in equal measure. Despite noticeable skepticism among analysts, hopes for a revival in Chinese business prevailed on the market, especially as a significant decline in deliveries had previously been feared. Disappointing USDA export reports therefore faded into the background. The entire oilseed complex was also supported by firm conditions on the energy market.
Canola in Winnipeg benefited over the course of the week from the strength of the soy complex and from new guidance on the US clean fuel tax credit, which favors North American commodities. Rapeseed on Euronext Paris also followed the positive trend and rose steadily.
ZMP Live Expert Opinion
In the short term, the oilseed market is likely to continue to depend heavily on political statements and their credibility. The rally shows how sensitive the trade is to possible Chinese stimuli. At the same time, the fundamentals remain mixed, as exports and processing are not consistently convincing. The development of soybean stocks in Argentina remains a risk factor with a potentially price-driving effect. Biofuel policy guidelines could provide additional support for canola and rapeseed. Overall, the upside potential appears to exist, but is susceptible to rapid changes in sentiment.
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