Upward momentum for agricultural products faces considerable resistance, and the supply-demand pattern remains unchanged
Along with the arrival of the peak demand season at the end of this year, global agricultural product prices have staged a rebound. However, because the global pattern of agricultural product supply exceeding demand remains unchanged, the resistance to upward price movement for agricultural products such as soybeans and corn is still considerable. From early October to now
Along with the arrival of the peak demand season at the end of this year, global agricultural product prices have staged a rebound. However, because the global pattern of agricultural product supply exceeding demand remains unchanged, the resistance to upward price movement for agricultural products such as soybeans and corn is still considerable.
From early October to now, speculative funds have reduced some short positions, driving global agricultural product prices, including soybeans, corn, and wheat, to rebound by about 5%. According to the position report released last Friday by the U.S. Commodity Futures Trading Commission (CFTC), in the week ended October 14, speculative funds held a net short position of 17,200 lots in soybean futures and options on the Chicago Board of Trade (CBOT), a decrease of 7,267 lots from the previous week. Open interest in soybean futures and options was 1,258,900 lots, up 22,300 lots from a week earlier.
At the same time, the latest report released by the U.S. Department of Agriculture forecast that China's soybean imports will hit a six-year high, boosting market confidence to a certain extent. The report said that China's soybean imports in 2013/2014 are expected to be 69 million tons, higher than the earlier forecast of 68 million tons. China's soybean imports in 2014/2015 are expected to be 72 million tons, which will set a six-year high. Based on global trade statistics, China's total soybean imports in the first three quarters of 2013/2014 were 51.83 million tons, a year-on-year increase of 24.6%.
Despite speculative funds reducing short positions and the bullish outlook for Chinese demand, market participants still hold differing views on whether agricultural product prices can stop falling at current price levels. After all, the broad pattern of supply exceeding demand in the global agricultural product market has not changed much, and moreover, the leader of bulk commodities——crude oil prices have fallen to around 80 U.S. dollars.
According to the latest statistics from the U.S. Department of Agriculture, the latest forecast for U.S. soybean production in 2014/2015 is 106.87 million tons, setting a record high. As of the week of October 12, the U.S. soybean harvest rate was 40%, higher than 20% a week earlier and approaching the five-year average of 53%.
The acceleration of the U.S. soybean harvest will increase the pace of soybean supply to the market. The grain exchanges of Brazil and Argentina have recently issued forecasts for soybean production in 2014/2015, both reaching record levels. Global soybean production for the new year is forecast to increase by 26.189 million tons from the previous year. At the same time, soybean crushing demand is forecast to grow by only 12.271 million tons. If there is no disastrous weather impact, the growth model of supply exceeding demand will drag down the medium-term trend of the soybean complex market.
According to a report released last Friday by the U.S. private analytical firm Informa Economics, U.S. soybean planted area in 2015 will reach a record 88.5 million acres. If this forecast comes true, it will represent the first time since 1983 that U.S. soybean planted area has exceeded corn.
In the corn market, the U.S. Department of Agriculture report showed that as of October 12, the proportion of the U.S. national corn crop rated good to excellent was 74%, unchanged from the rating a week earlier. As of last Sunday, the national corn harvest progress reached 24%, compared with 17% a week earlier, while the five-year average harvest progress for the same period was 43%. Although the usual trend is that the good-to-excellent growth rating declines as the crop approaches maturity, as of now the proportion of the U.S. national corn crop rated good to excellent is still 74%, far higher than the same period last year. This is the best rating for U.S. corn for the same period since 1994.
From early October to now, speculative funds have reduced some short positions, driving global agricultural product prices, including soybeans, corn, and wheat, to rebound by about 5%. According to the position report released last Friday by the U.S. Commodity Futures Trading Commission (CFTC), in the week ended October 14, speculative funds held a net short position of 17,200 lots in soybean futures and options on the Chicago Board of Trade (CBOT), a decrease of 7,267 lots from the previous week. Open interest in soybean futures and options was 1,258,900 lots, up 22,300 lots from a week earlier.
At the same time, the latest report released by the U.S. Department of Agriculture forecast that China's soybean imports will hit a six-year high, boosting market confidence to a certain extent. The report said that China's soybean imports in 2013/2014 are expected to be 69 million tons, higher than the earlier forecast of 68 million tons. China's soybean imports in 2014/2015 are expected to be 72 million tons, which will set a six-year high. Based on global trade statistics, China's total soybean imports in the first three quarters of 2013/2014 were 51.83 million tons, a year-on-year increase of 24.6%.
Despite speculative funds reducing short positions and the bullish outlook for Chinese demand, market participants still hold differing views on whether agricultural product prices can stop falling at current price levels. After all, the broad pattern of supply exceeding demand in the global agricultural product market has not changed much, and moreover, the leader of bulk commodities——crude oil prices have fallen to around 80 U.S. dollars.
According to the latest statistics from the U.S. Department of Agriculture, the latest forecast for U.S. soybean production in 2014/2015 is 106.87 million tons, setting a record high. As of the week of October 12, the U.S. soybean harvest rate was 40%, higher than 20% a week earlier and approaching the five-year average of 53%.
The acceleration of the U.S. soybean harvest will increase the pace of soybean supply to the market. The grain exchanges of Brazil and Argentina have recently issued forecasts for soybean production in 2014/2015, both reaching record levels. Global soybean production for the new year is forecast to increase by 26.189 million tons from the previous year. At the same time, soybean crushing demand is forecast to grow by only 12.271 million tons. If there is no disastrous weather impact, the growth model of supply exceeding demand will drag down the medium-term trend of the soybean complex market.
According to a report released last Friday by the U.S. private analytical firm Informa Economics, U.S. soybean planted area in 2015 will reach a record 88.5 million acres. If this forecast comes true, it will represent the first time since 1983 that U.S. soybean planted area has exceeded corn.
In the corn market, the U.S. Department of Agriculture report showed that as of October 12, the proportion of the U.S. national corn crop rated good to excellent was 74%, unchanged from the rating a week earlier. As of last Sunday, the national corn harvest progress reached 24%, compared with 17% a week earlier, while the five-year average harvest progress for the same period was 43%. Although the usual trend is that the good-to-excellent growth rating declines as the crop approaches maturity, as of now the proportion of the U.S. national corn crop rated good to excellent is still 74%, far higher than the same period last year. This is the best rating for U.S. corn for the same period since 1994.