The market adjustment proposed by last week’s forecast has performed significantly this week. Recently released customs data show that China imported 9.789 million tons of US soybeans in September, far exceeding 166,300 tons in August.
The recent outbreak of secondary health incidents in Europe and the United States has become a new uncertainty in the autumn and winter seasons. China has recently increased its imports of grains, energy, and other materials to prepare for the possible disruption of the global supply chain. In September, China imported 9.79 million tons of soybeans (5138, 163.00, 3.28%), a limited increase of 9.6 million tons from the previous month, but there have been significant changes in the structure.
September import data show that Brazil imported 7,245,100 tons of soybeans, a decrease of 904,000 tons from the previous month; the US imported 1,168,600 tons of soybeans, an increase of 1,002,300 tons from the previous month. Therefore, although the total amount is basically unchanged, the reduction in Brazilian soybeans is well compensated by American soybeans. From the perspective of time, the seasonal decline of Brazilian soybean exports will be more obvious in the later period, and US soybeans will dominate the global soybean export market in the next six months or so.
According to the latest US soybean export inspection report data, weekly US soybean exports have reached 2.66 million tons, and the single-week data is the highest since November 17, 2016.
The export capacity of U.S. soybeans in 2016/17 was 59.16 million tons, while USDA reported in October that the export capacity of U.S. soybeans in 2020/21 was 59.87 million tons. The export capacity difference between the two years was 7.1 million tons. In 2016/17, in terms of the structure of China’s imported soybean imports, Brazil surpassed the United States to become China’s largest source again. It was April 2017. However, this year, considering the record-high pre-sale progress of Brazilian soybeans (see above) and China There are still 30% of the U.S. agricultural product purchase quota that has not been completed. Therefore, U.S. soybean imports in the remaining three months will continue to exceed market expectations.
Considering the postponement of the inflection point of U.S. soybean demand, despite the uncertainty in Brazil’s precipitation forecast, there is not much room for the U.S. soybean callback. From the perspective of precipitation forecasts, future precipitation forecasts are much better than the previous period, but there is currently a low probability of sustained heavy rains that will ease the drought. Judging from various indicators, the momentum for the US soybeans to continue to rise is increasingly insufficient. In the short term, it is difficult for the domestic soybean meal (3195, -7.00, -0.22%) market to obtain greater additional support from the external market.
Under the continuous high volatility, the market mentality has changed. Those with early replenishment and basis contracts are generally cautious about replenishment, while those with insufficient inventory worry that the price will not be able to support the subsequent fall, so they wait for a callback.
As the leading indicator of the market, price will once again affect changes in market supply and demand. From the current point of view, apart from Cangzhou Cargill’s shutdown plan, the continuous full-open state of North China will continue to test the demand-side delivery capacity. However, with certain supply and relatively uncertain demand, the price of soybean meal, which continues to be high, has become increasingly unstable.