The US market is worried about Brazilian soybean growth, while Brazilian institutions are not convinced
US market investors are worried about South American crop growth again, and CBOT soybeans continue to rise on Friday, January 19 (Friday). Export demand from U.S. supply is expected to remain strong. American agronomists and farmers said that despite the drought delayed sowing and rainfall in some areas interrupted harvests, Brazil's soybean yield and yields are expected to catch up and even surpass the record highs reached last year, according to American agronomists and farmers. Fabio Meneghin, a partner at Brazilian agricultural consulting firm Agroconsult, said Friday that early soybean growth is better than expected by many farmers in northern and central Mato Grosso state, with farmland data collected this week showing a “positive tendency” for yields and yields. In March, it closed at 975.00 and rose by 2.00 or 0.21% (settlement price 977.25); in May, it closed at 986.50 and rose by 2.25 or 0.22% (settlement price 988.50).
Last night, news from US Bay local market, the average spot price of US No. 1 yellow soybeans was $10.1925 per bushel, or about $373.1 per ton, up 3.75 cents from the previous trading day. The basis quote for Louisiana Bay is 40 to 45 cents higher than CBOT's March soy futures price, and 39 to 45 cents higher on the previous trading day. However, in the central Illinois, soybean processing plants purchase soybeans at an average price of $9.6675 per prawn, up 6.75 cents from the previous trading day. The local soybean basis quote is 18 to 3 cents lower than CBOT's March soybean futures price per stock, and 18 to 8 cents lower on the previous trading day. This also gave American farmers a breath, after all, the price of CBOT soybeans rebounded by more than 30 cents.
US funds have increased their net short positions for six consecutive weeks, and the market is in an important observation period
According to Huiyi US market comprehensive information, the fund currently holds 70,025 long positions for soybean futures and options, 69,212 lots last week; holds 173,422 short positions, and 162,047 lots last week. Soybean futures options short volume was 886,347 lots, compared with 843,057 lots last week. A report released by the U.S. Commodity Futures Trading Commission (CFTC) shows that speculative funds continue to increase their holdings of net short positions in the soybean futures and options markets, which is also the sixth consecutive week of increase. For the week ending January 16, 2018, speculative funds held 103,397 net short positions in Chicago Futures Exchange (CBOT) soybean futures and options positions, an increase of 10,562 lots from a week ago.
We see that last night, the price of the US soybean futures market surged and fell, opening a range oscillation mode. But what we are most concerned about now is the next trend of US funds: should we continue to increase short positions, or should we encounter multiple factors that will quickly escape like the last time (July 2017)? In addition, there seem to be another major problem in Sino-US trade relations recently that needs to be resolved, especially at the end of January when the US President issued a State of the Union address: To start a trade war with China? Or is it a one-time, huge intellectual property fine to China? We should make comprehensive arrangements for emergency plans for China's soybean import or domestic soybean meal procurement in advance, and we must prepare for the future.
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