Soybeans were volatile last week, but slightly firmer overall. Strong processing and export data from the US and stable demand from China provided support at the start of the week. An initial rally in soybean oil gave the entire soy complex additional momentum. At times, the confirmation of high Chinese purchases by government representatives generated buying interest. At the same time, however, concerns about the competitiveness of US exports persisted. While Chinese imports for 2025 have been estimated at a new record level, Brazil could become the dominant source of supply. The Brazilian harvest is slowly gaining momentum, but is uneven across regions. Weaker export forecasts for January and fears of declining demand dampened prices at the end of the week. Soybean meal was able to escape the generally directionless trading at times and recorded moderate gains.
Canola initially benefited from the announced compromise between Canada and China, which provides for significant tariff cuts from March. However, the glimmer of hope for new export impulses was not enough for sustained price gains, especially as there were no further bookings. Only a sharp jump in the price of soybean oil and new market speculation about possible additional canola purchases by China revived the market in the middle of the week. Support also came from the Canadian Agriculture Agency, which expects a lower canola harvest for 2026/27. On Euronext, rapeseed was also firmer, driven by the international environment and a robust price trend for palm oil. However, there was a slight correction towards the end of the week.
ZMP Live Expert Opinion
The oilseed markets are in a phase of relative uncertainty. Although China's stable demand continues to support the US soybean market, Brazil is likely to take the lead in exports in the medium term due to the expected record supply. Weakening US prices remain a factor of uncertainty, as do political tensions with the EU. In the case of soybean oil, the prospect of rising demand from the biofuel sector is brightening the picture. Canola is currently benefiting from hopes of new export impetus to China, but needs to be underpinned by facts in the short term. Rapeseed is robust on Euronext, but remains dependent on the international environment and developments in the vegetable oil market.
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