August soybean futures on the Chicago Mercantile Exchange fell 4.3% to $1,020/t yesterday, giving up a week's gain but still remaining 5% higher than a month ago.
According to USDA's NASS, the number of U.S. soybeans in good or excellent condition increased 2% to 68% for the week (51% last year), which also increased pressure on soybean and soybean oil quotes.
September Brent crude oil futures for 4 sessions fell by 3.3% to $84.6/barrel (-2% for the week, +4.1% for the month), which also negatively affects quotations of vegetable oils and oil cultures
Awaiting the Malaysian Palm Oil Board's supply and demand report and following soybean oil prices, August palm oil futures on Bursa yesterday fell 2% to RM3,959/t or $841/t (-3.3% per week), as traders expect inventories to increase due to increased production and reduced exports. According to the average estimate of 12 planters, traders and analysts polled by Reuters, palm oil stocks rose by 4.53% to 1.83 million tons in June.
Bulgaria expects good yields
In many places, the weather in early summer is decisive for the development of crops and therefore also price trends. In Russia and Ukraine, the hot weather at the end of June and beginning of July could have a negative impact on spring crop yields, while winter crops would ripen faster and favour their harvest.
In the EU, however, persistent rainfall in recent weeks has dampened the prospects for oilseed production. The forecast for the 2024 rapeseed crop in Bulgaria has also been reduced due to unfavourable weather conditions...
Traders are unsettled
On 1 July, a new regulation came into force that imports of agricultural goods that are delivered to the EU from or via Russia and Belarus must be taxed at a higher rate. In the case of flaxseed, the increase will be staggered, starting at 10% and rising to 20% next January. This will encourage flaxseed traders in other countries to raise their prices as well.
According to ATREA BROKERS, compared to the previous season, imports to the EU in 2023/24 MR:
- sunflower - decreased by 65% from 2.2 million tons to 767 thousand tons (of which 423 thousand tons were delivered from Moldova, 226 thousand tons from Ukraine, 52 thousand tons from China, 29 thousand tons from Turkey and 11 thousand tons - from the USA),
- rapeseed - decreased by 24% from 7.4 to 5.6 million tons (of which 3.1 million tons were delivered from Ukraine, 1.8 million tons from Australia, 248 thousand tons from Moldova, 135 thousand tons from Serbia, 120 thousand tons - from Canada),
- corn - decreased by 27% from 26.4 to 19.3 million tons (of which 13.3 million tons were delivered from Ukraine, 2.9 million tons from Brazil, 1.2 million tons from Canada),
- soybeans - remained at the level of 13.07 million tons (of which 5.9 million tons were supplied from Brazil, 5.3 million tons from the USA, 956 thousand tons from Ukraine, 553 thousand tons from Canada, 130 thousand tons from from Uruguay),
- soybean meal - decreased by 2% to 15.7 million tons (of which 9.1 million tons were delivered from Brazil, 3.7 million tons from Argentina, 952 thousand tons from the USA, 527 thousand tons from Ukraine, 487 thousand tons - from Paraguay),
- soybean oil - remained at the level of 518 (515) thousand tons (of which 212 thousand tons were delivered from Ukraine, 134 thousand tons - from Argentina, 68 thousand tons - from Norway),
- sunflower oil - increased from 1.7 to 2.8 million tons (of which 2.7 million tons were supplied from Ukraine, 80.5 thousand tons from Serbia and 43 thousand tons from Moldova).
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Too little sunshine for wheat in France
Despite news being that yields are lower than anticipated in France wheat quotations have dropped. By contrast, US yields range higher than last year. US winter wheat harvesting is 63% complete, which is 9% above average. In southern Russia, farmers have threshed 13.1 million mt of grains on 10% of the area sown with yields being 20% higher than last year. In Ukraine, 1.6 million mt of wheat have been harvested, which is 11% of the area sown. Although this is clearly up on last year, yields are similar. Ukrainian milling wheat...
At the same time, China increased its import of rapeseed from 0.91 to 1.07 million tons, and EU countries - from 0.23 to 0.87 million tons.
In general, in 2023/24 FY, world rapeseed exports amounted to 15.41 million tons, while in July - May 2022/23 FY, it reached 16.57 million tons. At the same time, exports from Canada decreased from 7.37 to 5.96 million tons , but grew from Australia from 5.35 to 5.67 million tons and from Ukraine - from 3.42 to 3.66 million tons.
In the current season, China reduced rapeseed imports compared to the previous season from 4.17 to 4.07 million tons, the EU - from 6.59 to 5.81 million tons, Mexico - from 1.22 to 1.14 million tons, then as Japan increased imports from 1.68 to 1.97 million tons.
In the current season, sunseed and soybean production is expected to grow, while the gross harvest of rapeseed may decline.
The soybean harvest is expected to increase by 7.5%, from 4.743 mln tonnes in 2023/24 MY to 5.1 mln tonnes. This growth will be due to the increase in the planted area by 7.4%, to 1.97 mln ha, while the oilseed yield will remain at the level of the previous season and amount to 2.6 t/ha.
The sunseed harvest is forecast at 13 mln tonnes, up from 12.76 mln tonnes in 2023/24 MY (+2%). The yield of the oilseed will not change as well, and will amount to 2.4 t/ha, while the area under the crop will increase to 5.3 mln ha (+2%).
- As for rapeseed, Ukroliyaprom forecasts its harvest at 4.1 mln tonnes, which is 2% down from the 2023/24 MY (4.184 mln tonnes). The projected decline in production will be due to a 4.3% decrease in the oilseed area, to 1.37 mln ha, while the rapeseed yield will remain at the last year’s level and amount to 2.9 t/ha.