The soybean markets experienced a rollercoaster ride this week, characterized by fluctuating export impulses, record expectations for US yields and competitive pressure from South America. Beans held their ground at the start of the week despite trade tariff concerns and China's continued reluctance to buy, while the soybean meal market benefited from a strong countermovement. Surprisingly high US export inspections, which climbed to a six-year high for this time of year, had a supporting effect. Germany and Egypt were the leading buyers.
In the middle of the week, an estimate from S&P Global depressed sentiment: with an expected 53.5 bushel/acre (~36 dt/ha), acreage yields were well above the USDA forecast and on course for a record. Despite continued Chinese restraint, the June census data showed solid US soybean exports. This was followed by a renewed fall in prices, also burdened by the expectation of a heat wave in parts of the growing regions. At the end of the week, strong US export sales - from both old and new crops - provided a boost. New crop sales reached a high for the year, while Brazil set an export record for the month with 12.3 million tons in July. China imported more soybeans in July than ever before for the month, even though the previous month's result was narrowly missed.
The canola market was initially dominated by selling pressure and weather-related negative factors in the Prairie States. Precipitation in dry regions and a weak environment pushed prices down to a two-month low at times. Towards the end of the week, a recovery set in, supported by tight old stocks and solid end consumer demand. Nevertheless, the aggressive pricing policy of the Australians, who are pushing into the Chinese market, is currently weighing on the mood of traders. On Euronext in Paris, rapeseed followed a volatile pattern: early losses, followed by a slight stabilization and a weekly finish in positive territory.
ZMP Live Expert Opinion
The oilseed markets are currently caught between two strong forces: On the one hand, the prospect of record-breaking US yields combined with ample Brazilian supply is putting pressure on price levels. On the other hand, strong US export sales and continuing high global demand, especially from China, are stabilizing prices. For canola, the weather in the Prairie States remains a decisive factor, although the recent rainfall could have a price-dampening effect in the short term. Rapeseed in Paris could recover if demand in the end consumer segment remains firm. Overall, a sideways movement with increased volatility seems more likely than a clear trend, unless the weather or trade flows provide new impetus.
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