Oilseed market: China and United States agreed more soybean supplies - real
The conclusion of the contract about 14 million tonnes of soya bean supplies by 2015/16 from the United States after China stopped the stock prices at their previous downward trend. The Brazilian Central Bank, with the support of the Brazilian currency has delivered real contributing with the result that the ratio was less than more than 4 real to $1. The euphoria of the soy farmers on high export opportunities was dampened for now times.
The recent IGC estimate to the soy market has again underlined the good supply situation in the oilseeds sector with the exception of rape. A second harvest with 317 million tons, which is only slightly behind last year's bumper crop comes to the average initial stocks by 2015/16.
Total supply exceeds the estimated higher consumption with the result that there is still room for an increase of closing stock from 47 to 49 million tons. The US harvest with 106 million tonnes is still only at the beginning, but the Outlook is not bad.
The sowing of soybean in the South American countries of Brazil and Argentina has begun. Currently, an vigorous expansion of cultivation between 3% and 5% will take place. To what extent the recent Brazilian currency developments and the presidential elections in Argentina develop yet a braking effect, remains open for the time being. When average earnings expectations, the soy crops could be increased In the spring of 2016, up to 5%.
However, the El Niño weather event in the way is. In South America, this means too much rain with the risk of flooding, rust and fungal growth on the plant.
The forward rate on the stock markets show no big moves for the last months of this year and the first months of next year.
COCERAL, the umbrella organization of European cereal and oilseed traders estimates that EU rapeseed harvest 2015/16 to 21.45 million tons, about 2.5 million t lower than in the previous year. Particularly, German rape harvesting with a decline of 20% has failed, while in France despite big fears behind the result only by 5% behind the previous year. Poland's rapeseed crop was a drawback of about 12%.
The International Grains Council (IGC) assumes that the rapeseed harvest 2016 in the EU does not go beyond the previous year. Canola prices were not conducive to the date of the extension decision. The problems with the avaricious also had a deterrent effect. Reducing the rape growing area is now the fourth in a series of years. More than a half million ha were lost throughout the EU.
The Ukraine is expected due to the drought also constraints when ordering the rape area. First rough estimates assume less canola acreage by about a third. Not ordered rape surfaces can be sown with wheat.
