The soy complex was mixed in the reporting week. At the beginning, the surprisingly bullish market trend following the Wasde report caused confusion, as the USDA raised its forecasts for acreage, yield and total production contrary to expectations. Many market participants interpreted Friday's price gains as a technical recovery at the supposed low for the year. By the middle of the week at the latest, however, disillusionment set in again: In view of the rising Brazilian harvest expectations and the sluggish US negotiations with China, the market came under renewed pressure. There was a glimmer of hope from time to time with the announcement of a telephone conference between Donald Trump and Xi Jinping, which will take place this Friday. However, concrete progress failed to materialize, as did the first Chinese soybean order of the current season. Export figures, on the other hand, were solid. US processing also reached a new monthly record in August, according to NOPA. Ultimately, however, these positive factors were unable to permanently reverse the bearish sentiment.
The week was similarly mixed for rapeseed and canola. Canola was initially supported by optimistic signals from a Chinese-Canadian trade dialog, before harvest feedback and the announcement of low export volumes increased the pressure. Statistics Canada put the expected canola harvest at 20.03 million tons, a slight increase on August. However, a decline is expected for soybeans in Canada. In Brazil, Conab raised its forecast for the upcoming soybean harvest to 177.67 million tons. Rising global supply forecasts and falling palm oil prices had an additional negative impact towards the end of the week. The European rapeseed market remained a ray of hope, remaining stable and recently posting significant gains.
ZMP Live Expert Opinion
The oilseed markets remain heavily influenced by geopolitical developments and new harvest estimates. While there are isolated signs of hope for an upturn in Chinese demand for soybeans, there has been a lack of concrete agreements to date. The latest statements from the political arena are being closely monitored, but have not yet had any lasting effect. The global supply picture remains comfortable, both in North and South America. Accordingly, any further progress in trade with China could provide short-term bullish impetus, but the overarching fundamentals currently point to a persistently bearish environment. European rapeseed prices are more stable, but here too the focus is increasingly on competition from canola from Canada. Overall, volatile sideways movements rather than clear trends are to be expected in the short term.
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