Soaring bran and grain stocks in China combined with finance take 4% off Chicago soybeans

Soaring bran and grain stocks in China combined with finance take 4% off Chicago soybeans

Bran and oil also drop at the CBOT. In Brazil, the losses inside the country already reach R$ 15.00 per bag and the drop in the ports is also strong. The weather is ideal for taking out low insurance.


Soaring bran and grain stocks in China combined with finance take 4% off Chicago soybeans

Soybean futures melted this Thursday (23) on the Chicago Stock Exchange and ended the day with losses of more than 4% among the most traded oilseed futures. The first months even lost the level of 16.00 US$ per bushel, July being worth 15.93 US$ and August 15.07 US$ per bushel. The longest have been working since yesterday below US$15.00.

The soybean and derivatives market – with a loss of more than 5% of oil – was again put to the test by the conjunction of worrying fundamentals on the demand side, with consumption in China very slow due to its zero tolerance policy against Covid, and strong aversion to financial risk.

“And the premiums didn’t react, and they even fell about 80 cents a bushel over the same period that soybeans fell US$1.70. Then the fixed price – which is the sum of Chicago and the premium – has fallen by one And this demonstrates that demand is very bad,” explains Eduardo Vanin, market analyst at Agrinvest Commodities.

Thus, prices observed inside Brazil lost, on average, up to R$ 15.00 per bag in this interval, with considerable losses also recorded in the country’s ports.

The rise in prices, which had been driven by supply and fears of another poor harvest in the United States, therefore began to come under pressure from more contained demand. And part of this contraction seen in Chinese purchases is due to the increase in stocks of soybean meal in the Asian nation – which have risen from 300,000 tons in March to more than a million tons now – and cereals. in ports, which exceed seven million tons.

“The physical market in China has also fallen and this is another demonstration that there is more supply at the moment and the demand is not very good. The light at the end of the tunnel is the breeder of pigs in China, which has improved its margins, since the price of corn and bran has fallen, and the price of pork continues to rise. And now the slaughter weight of the animals is expected to back to normal,” explains the specialist.

Thus, China, which should buy around 30 boats of soybeans per week at this stage, bought 15 to 18, confirming this slowdown in the pace of purchases.

Vanin also points to the weight of the harsh coronavirus policy not only on agricultural commodities – especially grains and oils – but also on metals, reflecting concerns about the Asian giant’s global economic growth, as well as the rest. of the world.

At the same time, the focus remains on the development of the new American crop. Although the next four weeks are expected to be warmer and drier, new maps have changed a bit, indicating milder temperatures and two chances of rain in seven days, which has put further pressure on prices.

More than that, the market is also waiting for the new zone review numbers that the USDA (United States Department of Agriculture) will bring next Thursday, June 30th.

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