Sun Nengji, Soybean Market analyst of Zhuochuang Information
[introduction] after May Day, prices in the southern producing areas gradually stopped falling and stabilized. CBOT soybean prices back to 1200 cents / cattail above the run, giving obvious support to the market mentality. Some of the goods in Huang-Huai-Hai producing area were converted into protein beans into processing enterprises, which alleviated the pressure on grass-roots surplus grain, superimposed commodity market sales areas and periodic replenishment support of processing enterprises, and stabilized the overall decline of soybeans in southern producing areas. However, at present, it is the off-season of demand, and many places are about to enter the summer harvest stage, and it is expected that the market in the southern producing areas will be stable before the wheat harvest.
The price fell for more than seven months and hit a four-year low.
Since the new grain was put on the market in October 2023, the soybean market in the south has entered the downward channel, during which the northeast has rebounded slightly, but the fundamentals in the south are weak.CryptogamesthatmakemoneyThe repressive effect is obvious, and the price has fallen to nearly four years.CryptogamesthatmakemoneyAt a low level. Take Huaibei, Anhui as an example, as of May 14, the loading price of over-specific gravity net grain is 2.Cryptogamesthatmakemoney.40-2Cryptogamesthatmakemoney.45 yuan per jin, down more than 20% compared with the same period in 2023. After May Day, the southern producing areas finally put an end to the decline that lasted for more than half a year.
The pressure of surplus goods in the producing area is alleviated by the gradual digestion of secondary beans.
In the first quarter and the early second quarter of this year, the overall surplus volume in the southern producing areas was higher than that in the same period in previous years. Due to the continuous overcast and rainy weather encountered in some areas during the listing of new grain last year, there is a big difference in the quality of goods supply, and the overall digestion speed of goods supply is relatively slow, especially in Henan, Anhui and other places. The secondary bean supply flooded the market, which obviously suppressed the market situation. Since March this year, while prices in the southern producing areas have continued to decline, the price decline in the northeast producing areas is lower than that in the southern producing areas, mainly due to the continued acquisition support of the main body of the acquisition. As a result, the price of secondary beans in the south is significantly lower than that in the northeast, and the performance-to-price ratio is gradually reflected. In April, protein processing enterprises gradually opened the acquisition model, and the secondary bean supply in Huang-Huai-Hai production area was transformed, and the overall proportion of surplus goods decreased significantly. As of early May, the proportion of surplus goods in the southern producing areas has dropped to about 40%, which is still higher than that in the same period in previous years, but under the background of low supply of high-quality goods in various places, the overall pressure on the commodity market has been significantly alleviated. It can be said that the continuous acquisition of protein processing enterprises in April has played an obvious role in backing the market.
CBOT soybean has obvious rebound and boost effect.
Since the first quarter of this year, CBOT soybean futures have been running below 1200 cents / bushel for a long time, and the cost of domestic imports to Hong Kong is expected to fall. During May Day, due to rainfall in South America affecting soybean harvest, continuous rainfall and flooding in parts of Rio Grande do Sul, Brazil, resulting in damage to the quality of local soybeans, the progress of soybean harvest in Argentina was lower than the five-year average, superimposed rainfall in the Midwest of the United States led to a slowdown in soybean sowing, and international soybean futures prices rose. On April 30, the closing price of the main contract was 1162.5 cents / bushel. After closing at 1245.75 cents a bushel on May 6, the highest close since January 10, overall prices fell but remained above 1200 cents a bushel in the following week. The return of 1200 cents / bushel above to give domestic imports to Hong Kong cost support and domestic spot market mentality support.
At the current stage, the USDA export inspection report shows that US soybean exports continue to show off-season growth, climbing for the second week in a row, reaching a three-week high. As of May 9, 2024, the inspection volume of US soybean exports was 406052 tons, up 13% from 358082 tons a week ago and 113% from 190437 tons in the same period last year. According to the USDA crop progress report, 35% of soybeans in the United States had been sown as of May 12, below market expectations of 39%. Due to the weather, the sowing schedule in Illinois, the state with the largest production, fell by as much as 35% year-on-year, while most parts of Iowa, the second largest, were still unable to sow seeds, a year-on-year drop of 24%. The loss of some remaining soybeans in Rio Grande do Sul caused by torrential rains in Brazil still needs to be further assessed, with a possible production reduction estimated at 2.4 million-2.8 million tons. The phased profit will boost the CBOT soybean market in the short term, and the cost of import to Hong Kong will be supported to a certain extent, which will further support the domestic spot market.
The "fear of falling" mentality is gradually digested.
Due to the continuous decline in early market prices, the market has a strong "fear of falling" mentality, and inventories in all aspects of production and marketing areas remain low. As the secondary soybean supply in Huang-Huai-Hai production area has a stable flow, the supply pressure in the production area is gradually alleviated, the superimposed CBOT soybean returns to run above 1200 cents / cattail, the market fear of falling mentality is gradually digested, the commodity market sales area and some soybean products processing enterprises gradually start a relatively stable replenishment rhythm, the demand is higher than before May Day holiday, the overall circulation speed of goods is accelerated, and the supply of high-quality goods in many places is relatively less. Some areas have a certain psychology of cherishing sales at a low price, and the phased bottom characteristics of the southern producing areas appear.
The rebound in demand in the off-season is not strong.
Although the southern producing area shows the characteristics of phased bottom, it is now in the seasonal off-season, and the prices of products such as green vegetables and meat and eggs are relatively low or reduce the consumption of soybean products, and after relatively concentrated replenishment, the market needs a certain amount of time to digest the previous replenishment, and the expected demand lacks continuous follow-up, superimposed southern producing areas are about to enter the summer harvest stage. It is expected that some hawkers and dealers in some production areas may still have the demand for warehouses and funds before wheat harvest, and there may be low-price shipments in some areas, and the market lacks momentum to rebound. However, in the short term, the market continues to decline before the wheat harvest, the momentum weakens, the space narrows, and the overall market is expected to be stable.