The soybean market on the Chicago Stock Exchange is starting another week, with attention not only on grain prices but also on the behavior of oil and bran prices. Currently, derivatives reflect two distinct situations: bran remains under pressure and scrutiny, while soybean oil, along with vegetable oils in general, is in a more favorable position, even bolstering grain futures.
Market analyst Eduardo Vanin, from Agrinvest Commodities, provided insights into both scenarios during his interview with Bom Dia Agronegócio on Monday (18).
SOYBEAN MEAL
Sales of meal in China continue to perform well, driven by increased demand due to greater competitiveness against competitors and higher consumption, particularly for younger pigs weighing up to 15 kilos. This indicates a heightened demand and positive breeding margins. Despite this, the market is experiencing some pressure, reflecting the improvement in food consumption in China. However, this comes with nuances, as restaurants are experiencing increased sales but at lower prices, which hinders significant price hikes in meat and consequently impacts bran and soy prices.
Additionally, last week, rumors circulated about Argentina potentially implementing a new round of 'soy dollars,' which contributed to downward pressure on derivative futures on the CBOT. Vanin notes that the Argentine government has not yet initiated discussions with industries, which typically precedes the introduction of 'soy dollars.' Thus, for now, it appears unlikely, but monitoring continues.
VEGETABLE OILS
The current outlook for vegetable oil prices is positive. Over the past 12 months, there has been a significant decline in flow, with production decreasing faster than exports. Consequently, stocks, including palm oil, are dwindling in Malaysia and Indonesia, with the exception of sunflower oil, which is experiencing growth. Despite the reduced volume, there is a consistent discount for corn, wheat, and sunflower oil due to the Russia-Ukraine conflict, which keeps the market subdued. However, the most notable development is the decline in production and trade of palm oil, leading to its increased cost relative to soybean oil, which is considered more premium. This dynamic provides support for oils, consequently bolstering soybeans.
Comments