The soy complex ended the previous week with an overall calm, slightly firm trend. Prices initially followed the gains of the previous days, while market participants waited primarily for new data on the processing of fats and oils in the US. At around 227.8 million bushels, processing in January as reported by the US Department of Agriculture was close to expectations and therefore provided little new impetus. Rising soybean oil stocks, on the other hand, had a negative impact. At the same time, attention increasingly turned to South America. Several analysts reduced their forecasts for the Brazilian soybean harvest slightly to around 178 million tons, while harvest progress continues to lag behind the previous year's level. Nevertheless, the expected production level remained high and temporarily dampened the buying mood. However, the market was dominated by geopolitical developments this week. The conflict in the Middle East caused significant movements on the energy markets, which also boosted soybeans at times. Nevertheless, fundamentals came back into focus. These included weak US export bookings and the prospect of large deliveries from Brazil, whose exports could rise again in March. At the end of the week, the strong crude oil rally in particular supported prices, while soybean meal remained under pressure for the most part.
International developments also dominated the rapeseed and canola market. Most recently, China's decision to partially suspend tariffs on Canadian agricultural imports caused canola to rise sharply. This news raised hopes of an upturn in trade with this important sales market. The market remained volatile in the further course of the year and partly followed the lead of competing vegetable oil markets. Rapeseed briefly came under pressure in Paris before rising energy prices and the generally friendlier environment provided support again. The Canadian acreage forecasts also attracted attention. At 21.8 million acres, the expected canola acreage was slightly smaller than the market had expected. However, traders pointed out that the data was collected before the latest trade agreement with China and therefore does not take into account possible demand stimuli.
ZMP Live Expert Opinion
The oilseed market is currently caught between geopolitical risks and very comfortable supply prospects in South America. The expected large Brazilian soybean harvest in particular is likely to intensify international competition in the coming weeks. At the same time, the latest export figures from the USA show that demand cannot keep up without restrictions. In the short term, however, energy prices could continue to act as an important sentiment factor, particularly for soybean oil and the entire vegetable oil complex. The further development of trade relations between China and Canada also remains relevant for the canola market. The issue of Iran will remain dominant in the near future. The decisive factor will be whether the international community succeeds in ensuring safe passage through the Strait of Hormuz. There is currently no sign of an end to the conflict in the near future, suggesting that energy prices will continue to rise.
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