The soy complex was mixed in the reporting week. Soybeans initially moved sideways before gaining significantly towards the end of the week. The Pro Farmer Crop Tour provided impetus, with initial results in Ohio and South Dakota above the previous year's level. Although scouts also reported weather stress in parts of Indiana and Nebraska, positive yield estimates have predominated so far. The USDA inventory rating remained stable at 68% in good/excellent condition, which is a seasonal high since 2020. However, support came from a flash sale to Mexico and US export sales of the new crop, which at 1.143 million tons were well above expectations and marked a new high for the year.
In the soybean oil segment, the Nopa report in particular provided impetus. Soybean processing reached a record level of 195.7 million bushels in July, while soybean oil stocks fell to their lowest level in 21 years. This development gave soybean oil prices a noticeable boost, additionally reinforced by speculation about an imminent decision by the US Environmental Protection Agency (EPA) on exemptions in the biofuel sector. Soybean meal prices were also volatile, but were able to rise again towards the end of the week.
Economic policy tensions dominated the canola market. The introduction of provisional tariffs by China significantly depressed prices on the ICE Winnipeg, especially as initial Chinese purchases of Australian goods confirmed the market shift. There was only a technical recovery towards the end of the week. The rapeseed market on Euronext Paris followed the global lead, but remained volatile overall.
ZMP Live Expert Opinion
The soybean market reacted to contradictory impulses in the reporting week. While stable stock valuations and early crop tour results point to above-average yield potential, strong domestic processing and declining soybean oil stocks are providing support. The tight oil supply in particular sent bullish signals towards the end of the week, although possible EPA decisions in the biofuel sector could provide additional momentum. In the canola segment, trade policy with China remains the main negative issue. The market reacted clearly, even if the recovery on Friday was more of a technical nature. The focus is now on new export figures and further yield estimates from the US growing regions.
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