The soy complex experienced a highly volatile week in which disappointed expectations and political rhetoric determined the price trend. The start of the week was initially dominated by losses following the new USDA figures, as the lowered export forecasts in particular weighed on sentiment. The initially celebrated China deal proved to be unclear in its implementation, which was also reflected in the USDA figures: Only a fraction of the reported export volumes were specifically attributable to China. An announcement by former President Trump that China was about to make extensive US import purchases then caused an abrupt turnaround. This statement boosted the prices of soybeans and soybean meal significantly in the meantime. After the market closed, the media actually reported orders for several hundred thousand tons from COFCO. Confirmations from the USDA followed on Tuesday and Wednesday with sales totalling over 1.1 million tons. Nevertheless, market participants remained skeptical, as the volume is far from the publicly discussed targets. As the week progressed, profit-taking and new Brazilian export forecasts dominated the picture. The harvest estimate there was adjusted slightly downwards, but remains high. At the same time, declining export inspections and weak soybean meal figures did not provide any new support for the market. Other oilseeds were also unsteady: While canola benefited from reluctant sellers in the meantime, the smouldering China conflict weighed on the export business. In Paris, rapeseed largely followed the impulses of the soy complex and fluctuated in a narrow range around the €485/t mark.
ZMP Live Expert Opinion
Despite some positive headlines, the soybean market remains in a phase of uncertainty. Although the announced Chinese purchases are supporting sentiment in the short term, they are nowhere near enough to achieve the forecast exports. Although harvest estimates in South America have been reduced slightly, global supply remains abundant. Although the processing figures in the USA provide support, there is a lack of sustained tailwind from the export business. The rapeseed market is largely moving in the wake of the soybean segment and is suffering from continued restraint in international trade, particularly in the canola sector. In the short term, the environment therefore remains volatile with limited upside potential.
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