Price
Concerning the prices from those last 2 week, we can observe with the picture that represent the prices of soybean on a 1 year basis, that today the price is quite stable. It varies from USD 880 per hundred bushels to the price today which is USD 890 per hundred bushels.
It is quite a normal situation as the inventories from both biggest exporters, Brazil and USA are countering each other in the supply side. Brazil is exporting the old crop and USA the new one. It means that the supply side expect prices that are stable.
The demand is stable as Soybeans are needed over long term not for one period in time. Therefore the price is acting quite normally.
Forward curve
Two weeks later we still see the same trend regarding the upward trend, we already explain why the forward curve stay flat during the period between July and september and it is due to the seasonal pattern that we explained two weeks ago. Thus, it is without surprise that we can see the same phenomena happening at the same time of the year but one year later. The simple explanation for this is, again, the seasonal pattern that will occur every year at the same time. So basically, this forward curve is quite normal and we can see that the market is stable and well supplied.
News
Argentina replaces China as biggest U.S. soybean buyer
During the last three months Argentina become the top buyer of U.S. soybean. Almost 1.3 million metric tons of oilseed have been exported to Argentina from September 1 until 22 November.
As we already know Argentina tend to processes its own soybean in order to keep the add-value on the product. But giving the fact that China is looking for non-American soybean or soybean product, Argentina is willing to export more raw soybean and buying more from the U.S. in order to respond from the demand of China and also because Argentina suffer from a drought earlier this year.
U.S. soybean farmers struggle to find buyers amid Trump’s trade row with China
As mentioned in the previous bulletin, American farmers have been stocking a staggering amount of soybeans since their main buyer, China, has been denying their trade offer. In this situation, farmers still have to pay their bills, as one of them put it, “you can’t pay your bills with patriotism”. To remedy with that, the Trump administration has issued a $12 billion program to compensate the loss due to that trade war. Nevertheless, this still hasn’t been able to fully cover the costs of production. As of now, that costs is higher than the current cash price so the do not even have to possibility to break even.
https://www.agweb.com/article/argentinareplaces-china-as-biggest-us-soybean-buyer/
http://marketqview.com/forwardcurvechart.php?ID=74&TYPE=Price
https://www.japantimes.co.jp/news/2018/11/28/business/u-s-farmers-silo-instead-ship-record-soybean-crop-trumps-china-trade-row-rages/
https://m.nasdaq.com/markets/soybean.aspx