Introduction: From the end of July to the beginning of August, some people say that the weather hype can slowly end. August is the most critical growth period for soybeans. The weather speculation may enter the later period, but the impact of weather changes is the largest. I think it is also the most sensitive to market changes. If the international soybean price is difficult to get rid of the high volatility pattern, the domestic soybean meal price will not be too low.
1. Technically, the price of US soybeans remains high and fluctuates.
It can be seen from the figure below that the upper line of international soybean prices is the high point of these two rebounds, which is the line of 1047 cents and 1027 cents, respectively, forming downward pressure; the price of the two stop-down prices is the same as the straight line formed by 984 cents, and now the price It is operating in this price range.
From the time point of view, at this time, the basis will not buy or sell short, the weather is not certain after all. Therefore, the price maintained a relatively high shock pattern in line with the current fundamentals. The investigation reports of relevant institutions entering the market in August will be issued one after another, and the USDA soybean supply and demand report will be released in August and October in the United States time. At that time, the current soybean goodness rate, weather conditions and market investigation reports will eventually form the market. Yield assessment. The US Department of Agriculture's trend of using soybeans for soybean production is 48 bushels per acre.
Second, the weather in the United States this week is still in line with the price is easy to support
Regarding the weather in the United States, the market presents different voices. Some agencies have assessed that the weather in the United States in early August is more ideal, which is conducive to soybean growth. There are also different sounds. Judging from the forecast of precipitation in the next 6-10 days in the United States, some states still have less rain and drought. As for the degree of cooperation of the market, we can only say that it will not drag down the price, but it will not form a strong supporting factor.
3. The stock of soybean meal did not decrease, and the contract volume also maintained a high level during the same period
Accounted for 1.2 million tons of soybean meal stocks in coastal oil factories last week, and 1.1 million tons in the previous week. The stock of soybean meal has not declined, which is the fundamental reason that restricts the weakness of soybean meal and the strength of it. However, as the basis of soybean meal continued to gain popularity, the contract volume of soybean meal remained high. According to statistics, the contract volume of soybean meal in the previous week was 4.36 million tons, which was a significant decrease from 4.94 million tons in the previous week, but it was still at the highest level in the same period in history. According to statistics, the crushed soybean import volume of oil plants last week was 1.76 million tons, down 130,000 tons from the previous week of 1.89 million tons. The reduction in soybean crushing volume and the increase in inventory indicate the process of market purchase or delivery. In the next two or three months, the domestic soybean market will enter the process of destocking. From the beginning of the year to the end of April, the soybean meal market showed strong internal and external weaknesses. After May, the market reversed. Now it has remained weak inside and strong outside. The most fundamental reason for our analysis is that domestic soybean imports have increased substantially, while market demand is average. In addition, the price of soybean oil in the first half of this year has been declining from the high point at the end of last year. This is reflected in the declining oil meal ratio, which keeps the theoretical cost of converted soybean meal high, which is also the reason for the high difference between the domestic soybean meal spot price and the theoretical cost.
In summary: in the period when the international soybean market is operating at a high level, it is easy to form support for the domestic soybean meal spot price. With the process of destocking the domestic soybean meal market, the pattern of internal weakness and external strength is expected to change. In this case, it is easy to bring benefits to soybean meal prices in the mid- to long-term, so we also recommend that the share of the contract settlement price of soybean meal bases picked up from August to October be increased.
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