Prices for Soybean and Rapeseed under tough times

PDF

Prices for soybean and rapeseed have been put under pressure as of late. According to last week reports from USDA soybean production for this new cycle would increase by 13% compared to the 2021/22 campaign worldwide. Resulting in a rise from 349.4 to 394.7 Mt, which reaffirms the trend of stocks being concentrated and expanding year after year within exporting countries. In fact, the Brazilian harvest, which is the most important today, would reach 149 Mt, a figure that represents an increase of 19.2% compared to the previous cycle (125 Mt). On the other hand, the US harvest is projected to grow by 4.6%, going from 120.7 to 126.3 Mt, while for Argentina a growth of 21.4% is expected. Achieving a record production of 51 Mt.

Export activity is projected to continue being led by Brazil with 88.5 Mt, growing by 6.9% compared to the previous season, while the United States would reach an export volume of 59.9 Mt, which means an increase of 2.8% compared to the last harvest. China continues to be the main importer of the oilseed worldwide with 99 Mt and a growth of 7.6% compared to the 2021/22 harvest.

prices

However recent accounts have set out some alarms and raised warning signs regarding soybean. Prices have come under pressure due to a variety of factors, and next to this decrease rapeseed prices have also fallen.

Tension between the USA and China has been on the rise due to the outspoken support of US president Joe Biden in favor of Taiwan. Hence, due to China’s major role as a soybean importer this has generated obvious pressure on prices. In addition to this, prosperous soybean sowing within the US has led to more optimistic harvest expectations.

prices

Indonesia eliminates export ban for palm oil

In addition to the previous scenario Indonesia has lifted its export ban on palm oil. Which leads to the assumption that such a measure should result in a relaxation of the vegetable oil market. However, it important to point out that exports will only become possible if the domestic market is predictable and price increases are countered.

On Monday May 23rd, the price of soy in Chicago’s futures market fell to approximately €580 per tonne. A slightly weaker dollar has helped to depress prices in euros to a certain extent.

Unsettling scenario for german farmers

Under the scope of the current scenario german farmers are a somewhat apprehensive in regards to the current prices. The German association of traders Bundesverband Agrarhandel has stated that their members want to keep farmers at previously agreed prices of around € 550 per tonne. They have affirmed that for 2022 more than half of the harvest has already been contracted. Bundesverband Agrarhandel emphasizes that increases in energy and transport costs because of the war in Ukraine affect all parties involved. However, this does not concede the right to any of the contracting parties, to drop contracts that were previously agreed upon.

Rain delays rapeseed sowing and affects current prices

Rapeseed prices and futures have also been affected as of recent. Close to the the middle of last week rapeseed prices took a precipitated drop. Climate conditions with an increase of rain, have slowed down rapeseed sowing in Canada. However, it must be noted that in the long term, this rain could be beneficial for yield potential. Such a fact has had significant repercussion, and as a result rapeseed prices have taken a tumble both in Canada and in Paris’ futures market. As a result, the quotation has fallen from €880 per tonne to €820 per tonne in the past few days. On Tuesday 24 May, the market had a small recovery with prices rising towards € 830 per tonne. Nonetheless, there is still great uncertainty of what will happen in the next few days, and upcoming weeks.