Despite individual attempts at recovery, the soy complex remained under pressure last week. Soybeans moved only slightly over the course of the week, but soybean meal recorded noticeable declines. This was partly due to the continuing lack of export agreements with China and partly due to the prospect of a bumper US harvest. While soybean exports recently fell short of the previous year's figures, advance bookings for the new season rose to their second-best level in 25 years. This fueled speculation that at least individual large-scale purchases are already being prepared, even if China has so far remained conspicuously absent. At the same time, reports of a significant increase in production forecasts in Brazil caused additional uncertainty. The market also focused on a possible easing of the US-Chinese trade conflict. A planned trip to Washington by the Chinese chief negotiator fueled hopes that a deal could be reached soon - with potentially sharp price fluctuations depending on the outcome of the talks.
Prices on the canola market were under considerable pressure. After starting the week with slight losses, the production report from the Canadian statistics authority caused a veritable price explosion on Friday. The estimated harvest volume of 19.9 million tons not only exceeded the previous year's volume, but also significantly exceeded the five-year average. This raises expectations of one of the best harvests in recent years, despite the small area under cultivation. Additional pressure came from trade with the Far East. China's tariffs on Canadian canola remain in place, while the government in Saskatchewan is trying to find diplomatic solutions. In Europe, rapeseed followed the weak canola trend and suffered heavy losses towards the end of the week.
ZMP Live Expert Opinion
The soybean market continues to be caught between optimistic advance bookings and China's conspicuous reticence. If there is a breakthrough in the upcoming talks between Beijing and Washington, prices could rise significantly in the short term. Until then, the market remains vulnerable to disappointment. The canola market, on the other hand, is likely to be affected by the above-average harvest forecast for the time being. Even if the estimate is conservative, supply is significantly more robust than previously expected. This is also weighing on the rapeseed market in Europe, which has been unable to escape the global downward trend. In the short term, the bearish factors prevail.
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