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US soybean futures accelerated
China Securities Journal
In the past month, the CBOT July soybean futures price of the main contract of the Chicago Mercantile Exchange soybean futures continued to fall. On May 13, the intraday price fell to 791 cents per bushel for more than ten years. Market participants pointed out that this year's domestic soybean supply exceeds expectations and the increase in South American soybean production is expected to put pressure on the US soybean futures market, and the pattern of oversupply in the US soybean market is difficult to improve in the short term, and the US soybean futures market is in a downturn.
The price continues to weaken
Data show that since April 16th, the US soybean futures contract CBOT July soybean futures prices have continued to decline.
In the 20 trading days since April 16, CBOT July soybean futures only rose in 3 trading days, during which the cumulative decline exceeded 10%. In the intraday trading on May 13, CBOT July soybean futures fell to 791 cents per bushel, a record low of more than a decade since December 2008.
As US soybean futures fell sharply, hedge funds also showed strong pessimism about the market outlook. According to data released by the US Commodity Futures Trading Commission (CFTC), as of May 7th, investors held a total of 160,553 net short positions in Chicago soybean futures and options, the highest level since the data was recorded in 2006; At the same time, short position positions increased by 6.4% to 220,453 lots, also reaching the highest level in history.
Oversupply is difficult to change
Market analysts pointed out that the pattern of strong supply and demand caused by oversupply in the soybean market put pressure on soybean prices. On the one hand, after several years of harvest, US soybean stocks have remained high; on the other hand, in May, Brazil, Argentina and other South American soybean producing countries entered a comprehensive harvest period, and high yield is a high probability event.
According to the latest report of the World Agricultural Supply and Demand Forecast published by the US Department of Agriculture (USDA), the supply of domestic soybeans, corn and wheat in the United States will exceed expectations in 2018-2019. At the same time, the US Department of Agriculture raised its forecast for US soybean stocks in 2018-2019 to 995 million bushels, well above its April forecast of 895 million bushels, which is also higher than market expectations of 920 million bushels. Reuters said that if this expectation is realized, the US soybean stock level will hit a record high.
At the same time, as South American countries continue to seize the soybean market share, the export situation of US soybeans is not optimistic. The US Department of Agriculture has previously announced a more pessimistic forecast that by the 2026/2027 harvest season, US soybean exports will not reach the peak of 2016/2017.
In addition, South American soybeans are also about to enter a full harvest period. Brazilian consultancy AgRural expects Brazil's total production for 2018/2019 to be 114.6 million tons, up from 112.9 million tons estimated in early April. The weekly report released by the Buenos Aires Cereal Exchange in Argentina showed that as of May 1, Argentina's soybean harvest progress reached 59.3%. The exchange predicts that Argentina's soybean production in 2018/2019 will reach 55 million tons, a 57% year-on-year increase.
Editor in charge: Fu Jianqing RF13564
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