Tuesday marked a quieter and uneventful day of trading that left soybean and meal markets higher at the close, while soyoil gave up ground and closed lower.
The USDA has long held their estimate for current year Chinese soybean imports at a record 97 MMTs, which if realized will represent 28% of the world’s 2017/18 production. The pace of imports through February was 38 MMTs, and right on track to reach the USDA’s forecast. In a report released this afternoon, the USDA’s Chinese Attache estimated that Chinese imports in the 2018/19 crop year would increase to 100 MMTs. The report noted that as due to price advantages, food processors in the coastal regions were increasing use of imported soybeans for food products, despite gov’t restrictions. Additionally, the report estimated annual crush capacity at 148 MMTs, with just 60% of that capacity being utilized this year.
Our view turned more neutral at the start of the month, and excess fund length has now been trimmed back. Broad ranging trade is expected into next week’s USDA reports, and rallies can be used to catch up on our sales recommendations.
