Soya bean market under pressure recently

In December, the global soybean trade side and supply side has become the focus of market attention. On the one hand, the reduction of Argentine soybean export tariffs will help to enhance its export competitiveness; the export competitiveness of American beans will be further weakened; and China's soybean imports will also usher in the annual peak. On the other hand, the USDA supply and demand report in December maintained the soybean high yield expectations of the United States, Brazil and other major producing countries in 2015 and 2016 unchanged, and the supply-side pressure showed no sign of easing. The author believes that under the double pressure of the trade side and the supply side, the soybean market is under a lot of pressure in the near future, and the price upward space is limited.

Argentina's New tariff Policy promotes Export Competitiveness

Around December, due to the uncertainty brought about by the Argentine presidential election, the market was full of doubts about the reduction of tariffs on Argentine grain exports. At present, Argentine President Maurizio Macri will sign a decree to abolish export tariffs on corn and wheat, reduce export tariffs on soybeans from 35% to 30%, and export tariffs on soybean meal and soybean oil from 32% to 27%.

The author believes that Argentina's policy of reducing grain export tariffs tends to be clear, and the reduction of Argentine soybean export costs will help to enhance export competitiveness and increase supply in the soybean trade market. Although the Argentine peso continues to depreciate, farmers may still be reluctant to sell in order to resist inflationary pressure, but the reduction of export costs and huge inventory pressure also make farmers have more incentive to export soybeans.

Continuous decline in exports puts pressure on the price of US beans.

While the export competitiveness of Argentine soybeans is improved, the export competitiveness of American beans is correspondingly weakened, and the recent export sales data of American beans are not good enough. According to the latest USDA weekly export sales report, exports of adzuki beans in the week of December 3 were about 1.629 million tons, down 18.7% from the previous week and 32% from the same period last year; compared with the same period in the past eight years, the weekly export volume fell to the fourth highest in history. According to the latest USDA export inspection report, as of the week ended December 14, the export inspection volume of American beans was 49.581 million bushels (about 1.35 million tons), down 22% from the previous week for four consecutive weeks, and about 29% from the same period last year. Third in history. In short, US soybean exports declined continuously in mid-early December, which had a negative impact on US soybean exports in 2015 and 2016, and put pressure on the price of US beans.

China will usher in the peak period of soybean import in December

According to the latest data from China's customs, China's soybean imports in November were 7.39 million tons, up about 34 percent from the previous month and about 23 percent over the same period last year, the highest in history. From January to November, China's soybean imports totaled 72.62 million tons, up 16 percent, 30 percent and 38 percent respectively over the previous three years, setting new highs for the same period in history. Generally speaking, December is the peak of soybean imports in the whole year. During the period from 2010 to 2014, soybean imports accounted for about 10.87% of soybean imports in the whole year, the highest for the whole year, so China's soybean imports are expected to reach another peak in December this year.

North and South American soybeans are expected to maintain high yield.

In North America, the USDA's December supply and demand report estimated that U.S. soybean production in 2015 / 2016 was 3.981 billion bushels (about 108.3 million tons), unchanged from November's forecast, so the trend of U.S. soybean production hitting a new high this year is basically clear.

In South America, on the one hand, major market institutions estimate Brazilian soybean production at 99.4 million to 102.5 million tons, while the United States Department of Agriculture reports that Brazilian soybean production is estimated to be 100 million tons, keeping record estimates; on the other hand, as of the week of December 10, the sowing progress of Argentine soybeans was about 68.6%, up from 54.4% a week ago and 1.8% higher than the same period last year. The United States Department of Agriculture still maintains a high yield estimate of 57 million tons for Argentine soybean production.

Thus it can be seen that the current global soybean supply pressure shows no signs of easing, and the soybean market is under a lot of pressure, thus suppressing the upward space of soybean prices.