SOYBEAN MARKET FALLS AS DEMAND REMAINS UNCERTAIN AND CHINA’S BUYING PLANS RAISE DOUBTS

THE GLOBAL SOYBEAN MARKET BEGAN THE WEEK IN DECLINE AMID WEAK EXPORT MOMENTUM AND GROWING UNCERTAINTY ABOUT SHORT TERM DEMAND ESPECIALLY FROM CHINA THE WORLD’S LARGEST BUYER. ACCORDING TO TF AGROECONOMIC ANALYSTS TRADERS REMAIN CAUTIOUS GIVEN THE SLOW PACE OF SALES AND THE LACK OF CONFIDENCE THAT SHIPMENTS WILL RECOVER BEFORE THE END OF 2025.

CONTRACTS AND DERIVATIVES DROP ACROSS THE BOARD

THE JANUARY SOYBEAN CONTRACT CLOSED DOWN 1.04% AT 1093.75 CENTS PER BUSHEL. THE MARCH CONTRACT FELL 0.92% TO 1105.75 CENTS. IN THE DERIVATIVES MARKET DECEMBER SOYBEAN MEAL SLIPPED 0.36% TO 303.6 DOLLARS PER SHORT TON WHILE SOYBEAN OIL DROPPED 0.90% TO 50.90 CENTS PER POUND.

THESE DECLINES OCCURRED EVEN WITH NEW CONFIRMATIONS OF SHIPMENTS AND FRESH REPORTS OF RECENT TRADES SIGNALING THAT MARKET SKEPTICISM ABOUT DEMAND REMAINS HIGH.

UNCERTAINTY OVER CHINA'S PURCHASES WEIGHS ON PRICES

THE MAIN FACTOR PRESSURING PRICES IS DOUBT ABOUT WHETHER CHINA WILL ACTUALLY BUY THE 12 MILLION TONS ANNOUNCED BY THE U.S. GOVERNMENT. ANALYSTS SAY THE TARGET IS OVERLY OPTIMISTIC.

MARKET EXPECTATIONS SUGGEST THAT THE REAL VOLUME COULD RANGE BETWEEN 5 AND 6 MILLION TONS ABOUT HALF OF WHAT WAS ANNOUNCED. SO FAR DATA INDICATE THAT ONLY 2,845,000 TONS HAVE BEEN SENT TO CHINESE PORTS A LEVEL CONSIDERED INSUFFICIENT TO SHIFT SHORT TERM MARKET SENTIMENT.

THE LACK OF CONFIDENCE IN CHINESE DEMAND PUSHED FUTURES TO TRADE BRIEFLY BELOW 11 DOLLARS PER BUSHEL A KEY PSYCHOLOGICAL LEVEL FOR TRADERS.

GLOBAL EXPORT SALES REMAIN WEAK

TOTAL EXPORT COMMITMENTS REMAIN 40% BELOW LAST YEAR’S LEVEL AS OF THE FIRST WEEK OF NOVEMBER. THE FIGURES REFLECT BOTH A SLOWER EXPORT PACE AND BROADER DEMAND UNCERTAINTY IN THE GLOBAL MARKET.

ANALYSTS NOTE THAT THE CURRENT ENVIRONMENT IS MARKED BY CONTINUED PRICE PRESSURE UNLESS THERE IS A STRONGER SIGNAL OF CHINA RESUMING LARGE SCALE PURCHASES OR A CONSISTENT IMPROVEMENT IN GLOBAL SHIPPING ACTIVITY.

CONCLUSION

THE SOYBEAN MARKET ENTERS THE WEEK WITH LOWER PRICES WEAK EXPORT EXPECTATIONS AND PERSISTENT UNCERTAINTY ABOUT GLOBAL DEMAND. WITHOUT A CLEAR RECOVERY IN CHINESE BUYING OR A SIGNIFICANT IMPROVEMENT IN INTERNATIONAL SHIPMENTS THE SHORT TERM TREND REMAINS LIMITED WITH RISK OF FURTHER DOWNSIDE CORRECTIONS.