Chicago soybean futures, ICE canola futures at Winnipeg and Paris rapeseed futures were all lower in overnight trade. Paris was off E12.25 on the August contract. Taking the AUD / Euro into account that’s equivalent to about -AUD$22.10. All three oilseed contracts continue to trade as if nothing has happened to the Argentina soybean crop.
BAGE, Buenos Aires Grain Exchange, has amended their crop rating for Argie soybeans to just 3% good to excellent. 37% of the crop is now rated fair. BAGE also reduced Argie corn condition to just 9% G/E.
Soybean production in Argentina is now estimated at 33.5mt according to BAGE.
In the most recent USDA WASDE report the estimate for Argentine soybean production is 41mt, Brazil is 153mt, combined that is 194mt. This is a year on year increase 20.6mt, from 173.4mt last year.
If Argentina only ends up producing 30mt and Brazil 150mt it still represents a year-on-year increase of 6.6mt.
Current S.American demand is estimated at 195.85mt by the USDA, this includes domestic demand and exports. This is an increase of 14.33mt over last year. So, the maths is suggesting that either the USA needs to pick up more exports or demand needs to shrink.
If the oilseed futures market continues to push lower this suggests the punters don’t think that the US demand will increase. Year on year the USDA have Chinese demand increasing from 91.57mt last year to 96mt this year. Does this suggest that the futures market has this priced in. The IGC doesn’t seem to think so. In their most recent world S&D update they reduced world production by 7mt and consumption by just 2mt.
HRW futures at Chicago were lower on further technical selling.