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Market risk appetite rises Chicago CBOT US soybean futures rebounded more than 4%

May 15, 2019 01:23
source: First finance

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Summary
[Market risk appetite rises Chicago CBOT US soybean futures rebounded more than 4%] On the evening of May 14, Chicago CBOT US soybean futures rebounded sharply. As of press release, it rose more than 4% to 834.75 cents per bushel, recovering nearly 5 transactions in one fell swoop. The decline since the day. (First Finance)

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On the evening of May 14, Chicago CBOT US soybean futures rebounded sharply. As of the press release, it rose more than 4% to 834.75 cents per bushel, and recovered in the past five trading days.

Since April, the price of US soybeans has unilaterally declined. On the evening of May 13, the main contract of US soybean futures was as low as 791 cents per bushel, the first time since 2008 that it fell below the $8 mark.

According to the May crop supply and demand report released by the US Department of Agriculture on the 10th, it is estimated that the US soybean stocks at the end of the period will be 970 million bushels, which is much higher than the previous forecast of 895 million bushels, setting a record high, and the farmers will face a cycle of falling into more and more losses. .

In other markets, the three major US stock indexes continued to rise. The Dow rose 1.23% to over 300 points, the Nasdaq rose 1.44 to over 100 points, and the S&P 500 index rose 1.25%.

US crude oil futures rose 1.46% to $61.90 a barrel; US gold futures prices fell 0.53% to $1,294 per ounce.

[Extended reading]

  Fall back ten years ago! US soybeans fell nearly 20% in the past year, Brazil has secured the world's largest soybean exporting country

Affected by high inventory levels and changes in the trade situation, internationalAgricultural productsPrices have continued to fall in the near future, and wheat, corn, cotton and other varieties have not been spared. Soybean prices once fell below the lows set in December last year, hitting a new low since the 2008 financial crisis.

The bad news is that this may not be over.

  High stocks suppress the price of beans

Since April, the price of US soybeans has unilaterally declined. Last week, the US soybean gap opened lower and fell by nearly 4%. The Chicago Board of Trade (CBOT) near-month soybean futures contract hit US$7.95 per bushel in the session, since 2008. For the first time, it fell below the $8 mark. The outlook for the new harvest season at the end of the year is also not optimistic. The November soybean futures contract fell to $8.30 per bushel in intraday trading on Monday, and the near-month contract rose by less than 4%, well below the historical average. The derivatives market is filled with a bearish atmosphere. According to broker statistics, as of May 6, the agency's position in the US soybean contract has reached 161,000 hands, a record high.

The price of such beans has made the farmers complain, and the latest research report from Iowa State University points out that the current cost of producing the main soybean varieties in the United States is 8.86-9.21 US dollars per bushel, which is a discount of nearly 10% to the futures price. Since hitting a high of $10.82 per bushel in March 2018, the US soybean has fallen nearly 20% in nearly a year.

In the past two years, US agriculture has faced great difficulties. According to the US Department of Agriculture, net income of US farms fell by 13% year-on-year to US$75.3 billion in 2018. It is expected that this figure will further decline by 8% this year to US$69.4 billion, compared with 2013. The record high reached a drop of 44%. Relatively speaking, the US government’s $12 billion subsidy program for compensating farmers has appeared to be a drop in the bucket. Because most of the United StatesAgricultural productsPrices have been running low for nearly two years, and growers have been forced to carry a heavy debt burden. According to a report released by the Federal Reserve in November last year, a total of 84 farms in the Midwestern United States filed for bankruptcy under Chapter 12 of the Bankruptcy Law, the highest since the financial crisis.

In the past two years, American agriculture has faced enormous difficulties.

In February of this year, Federal Reserve Chairman Powell went to Mississippi, the second poor state in the United States, to acknowledge the development of the rural economy. The US economy is in good shape, but in many rural areas, people have not experienced the prosperity brought about by economic development. Federal Reserve Governor Michelle Bowman also recently said that the Fed is closely tracking the recent farm bankruptcy issue. An agricultural credit survey released by the Kansas Federal Reserve on the 9th shows that the current financial situation may not allow the proportion of farmers who continue to operate in the future is increasing.

At this stage, the inventory of US soybeans is relatively serious. According to the May crop supply and demand report released by the US Department of Agriculture on the 10th, the US soybean stocks at the end of the period are expected to be 970 million bushels, much higher than the previous forecast of 895 million bushels, a record high. Farmers will face a cycle of falling into more and more losses. Nebraska agricultural economist Brent Gloy said the United StatesAgricultural productsPrices have been running at low levels for five years. Today, due to the cold weather in spring, planting in some corn producing areas has been postponed. In the past, farmers would choose to replant soybeans, but not many people dare to do so now. The situation is too bad.

In addition, the “African swine fever” epidemic that is spreading worldwide is also hitting the soybean market. Josef Schmidhuber, an analyst at the UN Food and Agricultural Organization, said in a report on the 10th that with the sharp decline in pig stocks, the trend of import demand for soybeans that has grown exponentially over the past 20 years may Suddenly stopped. The organization estimates that demand for soybeans and soybean meal products for feed this year will fall from 101.5 million tons to 98.4 million tons.

  Brazilian soybean prices surpass the US

Today Brazil has secured the world's largest soybean exporting country.

In 2018, Brazilian soybean exports reached 83.6 million tons, a record high, up 22.7% year-on-year. This situation is expected to continue this year. According to data from the Brazilian Ministry of Trade, Brazilian soybean exports rose steadily in the first four months of this year, and Brazilian soybean exports in January-February increased by 85.2% year-on-year to 8.2 million tons. In April, Brazil exported 10.5 million tons of soybeans, an increase of 10.6% from the 9.09 million tons in March. The Brazilian Agricultural Statistics Agency raised its estimate of Brazil's soybean production this year by 1% to 114.3 million tons, but it was 5.3% lower than last year's output of 121.8 million tons, mainly due to the production of early-maturing varieties in the dry weather at the beginning of the year. Impact.

In recent years, China has been the largest buyer of the global soybean market, buying more than 60% of the soybeans on the market. According to data released by the General Administration of Customs of China on May 8, the import of soybeans from January to April was 24.39 million tons, of which 7.64 million tons were imported in April, up 10.4% year-on-year. The largest import of Chinese soybeans this year is still Brazilian soybeans. According to data released by the customs, the share of Brazilian soybeans in China's soybean imports in March this year has risen to 57%, and the US soybean share is 31%.

Demand from China is pushing up the price of Brazilian soybeans and has already surpassed US beans in one fell swoop. According to S&P Global Platts data, the FOB price of soybeans delivered in June at the port of Paranagua, the main port in southern Brazil, was US$326.02/ton in early May, and there was a recent contract discount, while the New Orleans region of the United States in June. The price of soybeans delivered is $323.80/ton. In April, the average soybean price in New Orleans in the United States was nearly $4/ton higher than that of Brazilian soybeans.

At the same time, South America is another bigAgricultural productsArgentina, the producer country, is also adding more horsepower. The Buenos Aires Cereal Exchange expects the country's soybean production in 2018/19 to be 55 million tons, a sharp increase of 57% year-on-year. (Source: First Finance)

  【Related reports】

  A subsidy of 340 yuan per mu! Farmers in various regions responded to the soybean revitalization plan and planted a large area this year.

  US soybean futures accelerated

  "African Hog" hits US soybean exports Experts suggest that US farmers cut production a lot

(Article source: First Finance)

                (Editor: DF512)

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