South America new seasonsoybeanThe high yield is almost a foregone conclusion. With the large harvest of Brazilian soybeans on the market, it is expected that the market supply and demand will turn loose. my country’s imported soybean supply is abundant, and domestic breeding losses restrict the procurement demand of downstream enterprises.soybean mealThe price may continue to fluctuate and run weakly.
After the Lantern Festival, the oil mills basically resumed work. This week, soybean crushing volume will climb to more than 2 million tons, and the supply of soybean meal will increase. At the same time, because the price of pigs and grains has entered the first-level warning range of excessive decline, the breeding has suffered losses, but the price of soybean meal has remained high and volatile. , It is expected that the downstream will be more cautious in picking up goods, and will mainly pick up as needed.
Brazil’s export speeds up, US soybean pressure appears
Consulting company Safras data showed that as of February 3, Brazil’s 2022/2023 soybean sales volume was 46.72 million tons, equivalent to 30.5% of the expected output, higher than the 28.5% on January 6 and lower than the same period last year. 44.1%, also lower than the five-year average of 44.8% for the same period. Forward sales have been sluggish due to a slow harvest of soybeans in Brazil and farmers looking to sell at higher prices. In contrast, Brazil’s old soybean sales are better. As of February 3, Brazilian farmers have sold 97.9% of the 2021/2022 soybeans, up from 96% on January 6; The year-on-year average was 97.3%.
Brazil’s soybean harvest is in sight, but weather factors have slowed down the acquisition progress year-on-year. Brazilian consultancy Homeland Agribusiness (PAN) said that as of February 2, Brazil’s 2022/2023 soybean harvest progress was 9.86%, compared with 20.4% in the same period last year, because of the slow progress of the harvest due to rain in the main producing areas. Consultancy Safras expects Brazil’s soybean harvest to be 7.8 percent, down from 17.1 percent a year earlier and the five-year average of 10 percent for this time of year. Consulting firm AgRural reported that Brazil’s soybean harvest for the 2022/2023 season was 9% complete as of Feb. 2, lagging behind the 16% achieved a year earlier. Safras forecast Brazil’s soybean production at a record 154.373 million tons, while the USDA’s February report kept its forecast of 153 million tons unchanged.
Brazil’s new soybean harvest has been scheduled, but the harvest progress is slow, sales are not as good as in previous years, and the U.S. Department of Agriculture has lowered Argentina’s production forecast, all of which support the price of U.S. soybeans. Come on stress.
The Buenos Aires Grain Exchange (BAGE) reported in its weekly report that Argentina’s soybean planting progress for the 2022/2023 season was 100% for the week ending February 1, 2023, up from 99.3% a week earlier. Rains over the past week have resulted in improved soil moisture, with 47 percent of soybeans in fair to excellent condition, up from 37 percent a week ago. However, the high temperature and less rainy weather in December and the first half of January in 2022, coupled with the fact that the fastest-growing soybeans have begun to enter a critical growth period, may still affect the current soybean production expectations. As of February 1, 32.4% of Argentina’s soybean crop was in the critical yield-forming period. The exchange forecast Argentina’s soybean production at 41 million tonnes, down from 43.3 million tonnes in the previous season. The U.S. Department of Agriculture (USDA) also cut its forecast for Argentina’s soybean production by 4.5 million tons in February to 41 million tons, down from 43.9 million tons in the previous season.
South American soybean harvest my country’s imports may increase
On February 6, the National Grain and Oils Information Center released the “Monthly Report on the Supply and Demand of Oil and Oilseeds” in February. It is estimated that in 2022/2023 (October to September of the following year), my country’s protein meal production will be 96.06 million tons, an increase of 4.37 million tons year-on-year; Imports are expected to be 3.15 million tons, a year-on-year decrease of 1.04 million tons. It is estimated that the consumption of protein meal for this year will be 95.24 million tons, a year-on-year increase of 2.29 million tons; the export volume is expected to be 940,000 tons, a year-on-year increase of 430,000 tons; the annual protein meal supply and demand balance is expected to be 340,000 tons.
Starting from May 2022, the number of fertile sows on hand will rebound. According to the latest data from the National Bureau of Statistics, by the end of the fourth quarter of 2022, my country’s reproductive sow population will be 43.9 million, a month-on-month increase of 0.6% and a year-on-year increase of 1.4%. According to the monitoring of the National Development and Reform Commission, in the week from January 30 to February 3, 2023, the national average pig-grain price ratio was 4.96:1, entering the first-level early warning range for excessive decline. Recently, the price of live pigs has fallen, and the profit of breeding has declined. Some companies have lowered the proportion of soybean meal added to feed. In addition, considering the concentrated production of live pigs during the Spring Festival, the demand for protein meal consumption will be weak in the first half of 2023. The start of reserve purchase and storage work provides favorable policy support, the number of fertile sows has increased for the eighth consecutive month, and production capacity has continued to resume growth. The inertia of stock growth is still driving the demand for feed consumption to a certain extent. It is estimated that the protein meal feed consumption in 2022/2023 will be 96.06 million tons, a year-on-year increase of 4.8%. Among them, the consumption of soybean meal was 76.31 million tons, a year-on-year increase of 4.7%.
According to customs data, from October to December 2022, my country has imported a total of 22.04 million tons of soybeans, a decrease of 510,000 tons or 2.3% over the same period of the previous year. Since the second half of 2022, international soybean prices have fallen from high levels. In addition, South America’s new soybean harvest is almost a foregone conclusion. With a large number of Brazilian soybeans harvested and listed, it is expected that the market supply and demand will become looser, and the supply of imported soybeans will be abundant. With the recovery of the economic situation and downstream consumption, the consumption of protein meal is still on the rise this year, which will lead to an increase in the demand for soybean imports. It is estimated that my country will import 95 million tons of soybeans in 2022/2023, which is higher than the 91.61 million tons in the previous year.
Poor farming profits drag down demand for soybean meal
On February 8, the spot price of 43% protein soybean meal in coastal areas was 4,570-4,710 yuan/ton, an increase of 30-60 yuan/ton from last week. Among them, 4,630-4,710 yuan/ton in North China, 4,570-4,680 yuan/ton in East China, and 4,620-4,700 yuan/ton in South China. The spot basis quotation M2305+670-780 yuan/ton, down 20-40 yuan/ton compared with the same period last week.
In the first week after the Spring Festival holiday, the start-up of oil plants has not yet returned to normal levels. Monitoring shows that domestic soybean crushing last week was 1.28 million tons, an increase of 1.25 million tons over the previous week, a decrease of 710,000 tons over the same period last month, and an increase of 1.1 million tons year-on-year. Downstream feed companies picked up goods one after another, and soybean meal inventories dropped slightly. On February 3, the soybean meal inventory of major domestic oil factories was 460,000 tons, a decrease of 70,000 tons compared with the same period last week, a decrease of 130,000 tons compared with the same period last month, and an increase of 140,000 tons compared with the same period last year.
U.S. soybean crush demand is strong and profits are high. Argentina, the top exporter of soybean meal, is expected to lower its output, which will support U.S. soybean prices in the short term; however, a large number of Brazilian soybeans will be on the market soon, which may put pressure on prices. In addition, domestic breeding losses restrict the procurement demand of downstream enterprises, and soybean meal prices Or it will continue to run weakly.
Indonesia’s limited exports boost palm oil market
On February 8, 24 degrees in domestic coastal areaspalmThe price of oil is 7900-8080 yuan/ton, an increase of 180-200 yuan/ton over the same period last week. Among them, Tianjin is 8,070 yuan/ton, Shandong Rizhao is 8,080 yuan/ton, Jiangsu Zhangjiagang is 7,980 yuan/ton, Fujian Xiamen is 7,950 yuan/ton, and Guangdong Guangzhou is 7,900 yuan/ton. The palm oil port inventory remained the same as last week. The basis price of palm oil in coastal areas generally ranged from P2305-100 to +80 yuan/ton. The rise in the price of imported palm oil supported domestic costs, and the basis price remained stable.
Monitoring shows that on February 8, Malaysia’s 24-degree palm oil CNF price for March 2023 shipment was quoted at US$1,020/ton, which is equivalent to 8,330 yuan/ton (9% tariff and 9% value-added tax) at the duty-paid cost to Hong Kong, which is higher than that of DCE. The palm oil 2305 contract is 300 yuan/ton higher than last week, an increase of 30 yuan/ton from last week; the price of palm oil CNF for shipment from August to September 2023 is 1,000 US dollars/ton, equivalent to 8,070 yuan/ton of duty-paid cost at Hong Kong, which is higher than that of the 2309 contract High 155 yuan / ton. The edible palm oil inventory in coastal areas was 820,000 tons (plus 980,000 tons of industrial palm), which was flat week-on-week, increased by 40,000 tons month-on-month, and increased by 490,000 tons year-on-year. Among them, 130,000 tons were produced in Tianjin, 300,000 tons in Zhangjiagang, Jiangsu, and 240,000 tons in Guangdong. The domestic palm oil inventory is high, and the supply side is still under pressure.
Survey data showed Malaysia’s palm oil stockpiles likely fell to a five-month low as exports and production fell sharply. Indonesian officials said Monday that Indonesia will suspend most palm oil export permits to ensure domestic supplies due to rising domestic edible oil prices ahead of a Muslim holiday. Indonesian exporters can currently use about one-third of existing export permits, with the remainder continuing to be used after May 1. Exporters had licenses to export about 5.9 million tonnes of palm oil as of the end of January.
The strengthening of U.S. soybean oil and crude oil futures prices will boost the performance of Mapan palm oil. At the same time, Indonesia restricts the export of some palm oil. Malaysia’s palm oil inventory may drop to a five-month low, which will also support prices and push up my country’s import costs. Palm oil prices are expected to be stable and relatively strong in the short term.(The original text was published in version A03 of the Grain and Oil Market Report on February 11, 2023)
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