Despite recent rainfall in Argentina, drought in key growing areas is still likely to affect this season’s soybean harvest in the country, according to the Argentinian Buenos Aires Exchange’s report, released on Thursday 2nd February. The report also indicated that 46% of the crop was rated in poor condition. While this was a decline from the 54% indicated last week, current weather forecasts show more dry weather is expected in the coming weeks. Consequently, the US Chicago Board of Trade (CBOT) soybean futures price climbed to USc 1,534/60 lbs bushel, up by 1% week-on-week (w-o-w) and by 5% month-on-month (m-o-m) on Thursday, after a slight decline last week.
Nonetheless, the market sentiment for soybeans remains slightly bearish this season, on the back of a record Brazilian crop (+18% y-o-y at 153 million metric tonnes), which is expected to offset losses from Argentina. A Mintec source added, “while prices could rise momentarily, this could be pressured as soon as the Brazilian harvest commences.”
Looking at the EU, good supply conditions of alternative oils (sunflower and rapeseed) have limited upside risk to soybean and oil prices, as many buyers have turned to these sources. The Mintec Benchmark Prices (MBP) for Soybean Oil FCA Netherlands was assessed at $1,299/MT, down by 2% m-o-m on Thursday 2nd February.
