Rising soy prices in Chicago--largely stable prices in Hamburg

Ölsaaten Cockpit, 22.05.2014

  • Currently scarce availability of soya in the front dates
  • Soy meal shortages in the United States
  • Price recovery in China (how long?)
  • Great South American crops come increasingly to the market
  • Other oilseed prices are pushing more downward
  • expected price decline after the Chinese holidays
  • more high soy crops prospect, but with limited effect

Still rising soy prices on the US stock exchanges

Completed South American record soybean crops have so far left no impression on the front forward rates prevailing on the U.S. stock exchanges. The current low availability of soybean meal dominated the price action. Trigger for the recent price surge were the Chinese auctions of Government inventories to the private sector at surprisingly high prices. China's rising soy prices have propelled the Chicago stock market values. The processing margin of oil mills in China has improved, after rising prices in the pork and egg sector before the "Dragon Boat Festival" on the 1st and 2nd June 2014 has sped up the demand.

Increasing purchases of soybeans in South America once again generated signal effect. Fears of more restraint of sale and supply shortages for the next few months remain on the table. As long as no sufficient amounts of soy meal are concretely in the offer, the fixed rate mood in the United States remains.

The price of vegetable oils is crucial for the processing of soya beans. While the prices for Palm oil as the market leader play a crucial role in this area. The recent quotes in Kuala Lumpur currently show a strong case-ending trend under the brand of $780 je, after the threshold of $800 / t without resistance was taken. Behind this decline is the seasonally rising production in Malaysia and Indonesia, above the normal rate of increase. This creates the expectation of economic growth.

Missing revenues in the oil business urge to do some good in the shotgun sector.

In the course of the year 2014 due to the generally low rainfall, occur with high probability EL Nino weather anomaly should contribute to a constraint of palm oil production. This is still several months away. The remote effects are not sufficient to affect the current prices. The upcoming rains are even very cheap at the moment.

Soy meal prices on the Hamburg stock exchange have impressed only limited by the specifications of Chicago shows. Curiously, the most recent courses despite freight and marketing costs are par. The direct reference from South America with at least stable prices in Argentina and the lower 10% and significantly falling prices in the Brazilian port of Paranagua contribute significantly. Other reasons are to look only to the low part of the high euro exchange rate. Also the timely hedging transactions are likely to play a minor role.

The attractive high prices in the United States and China will help to keep the flow of goods not too abundant flowing towards Europe. Thus the possible price reductions be bogged down in this country as long as, as in the United States as a result of further imports or  own harvest from Sept. 2014 again is a fundamental trend in the supply to detect.

Rising soy prices in Chicago--largely stable prices in Hamburg
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ZMP Live Expert Opinion

The high and rising soy prices in the United States are a specific problem of supply shortages in the United States itself. The courses will have to give with growing South American supplies. The usually largely held specifications in Chicago reflects limited in Hamburg and other European import ports. After all, the effect is sufficient however for the time being to prevent a possible price drop in Europe. You will need to set up in this country for a few weeks on a fixed price development.

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