The soybean market started the week unsettled by the US Supreme Court's tariff ruling. Beans on the Chicago Board of Trade came under pressure at the start of the week, as market participants feared that China could again turn to more favorable offers from Brazil and Argentina. Weak US export figures reinforced this skepticism, especially as shipments fell well short of expectations and the seasonal value marked a multi-year low. Soybean meal was also initially unable to escape this environment.
The mood brightened noticeably towards the middle of the week. Statements from Beijing that no immediate countermeasures were planned and that a willingness to talk was being signaled caused prices to rise. At the same time, the Brazilian trade association ANEC lowered its February forecast for soybeans and meal. Rumors of possible large-scale Chinese purchases drove bean prices to a three-month high at times. However, the growing price gap between Brazilian and US goods remained a negative factor.
Towards the end of the week, doubts once again prevailed. Further mixed export reports from the USDA, the prospect of a record Brazilian harvest and uncertainties surrounding future US biofuel policy dampened the buying mood. A possible summit meeting between Washington and Beijing is also apparently on the back burner.
On the canola market in Winnipeg, the upward trend initially continued before taking a breather. Processing in Canada in January was up on the previous year, while deliveries were down. Prices stabilized again at the end of the week. On Euronext in Paris, rapeseed was volatile and generally followed international trends.
ZMP Live Expert Opinion
The markets remain heavily dependent on trade policy headlines. As long as there is no clear buying impetus from China, any rise is likely to remain vulnerable to setbacks. The large Brazilian harvest is acting as a constant counterweight to hopes of a revival in US demand. At the same time, the recent price spikes show how quickly sentiment can turn. Increased volatility is therefore to be expected in the coming weeks. The decisive factor will be whether concrete deals can underpin the latest hopes.
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