The soy complex was nervous at times over the course of the week and strongly influenced by geopolitical and energy-related impulses. At the end of the previous week, profit-taking initially followed the rallies, reinforced by a firmer US dollar. At the same time, contradictory reports on China's import policy towards Brazilian goods caused uncertainty in the export business. Towards the middle of the week, the expected expansion of US acreage and the upcoming decisions on biofuel quotas came into focus and weighed heavily on soybean meal in particular.
Towards the middle of the week, soybeans were able to temporarily decouple themselves from the weaker environment, supported by robust export data and individual large purchases. Nevertheless, market sentiment remained fragile as political signals regarding the Iran conflict and possible talks between the US and China triggered changes in direction at any time. Towards the end of the week, export sales that exceeded expectations and a stabilization in soybean meal provided a boost again.
Soybean oil also benefited from developments in the energy sector and rising demand for renewable fuels, which also supported the international vegetable oil markets. Canola largely followed the lead of soybean oil and crude oil, while rapeseed was comparatively stable in Paris and bucked the overall trend on several occasions.
ZMP Live Expert Opinion
The markets remain heavily dependent on political developments, particularly with regard to the Iran conflict and relations between the USA and China. In the short term, export data and energy-related stimuli are likely to set the direction. However, the expected expansion of acreage suggests limited upside potential in the medium term. At the same time, robust demand in the oil segment is providing a degree of stabilization. The decisive factor will be how the biofuel policy is actually structured. Overall, increased volatility is still to be expected, with no clear trend.
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