Source: CMEGroup of Zhi Merchants Institute
The United States is the major player in the world.CryptogamingtoinvestSoybean producing and exporting countries. The average annual output of soybeans in the United States in the past five years is 1.Cryptogamingtoinvest. fluctuates around 12.5 billion tons around the worldCryptogamingtoinvestThe proportion is about 30%, and the yield is mainly affected by the sown area and the weather conditions during the soybean growing period. Us soybean exports have declined year by year from 61.67 million tons in 2020 to 46.27 million tons in 2023, with a decline of about 25 per cent and the share of exports in production from 55 per cent to 41 per cent. There are two main reasons for the continuous decline of US soybean exports: one is that the sustainable expansion of US renewable production makes its domestic demand increase obviously, and the other is the decline of the competitiveness of US soybean exports.
Continuous expansion of renewable energy production capacity significant increase in domestic demand for soybeans in the United States
In terms of soybean demand in the United States, in July 2023, EPA issued a regulation on the quantity requirement of RFS from 2023 to 2025, of which the final total amount of EPA in 2022CryptogamingtoinvestOn the basis of .3 billion gallons, the total amount of renewable fuel will be increased by 1.5 per cent (20.94 billion gallons) by 2023, 4.4 per cent (21.54 billion gallons) in 2024 and 8.2 per cent (22.33 billion gallons) in 2025. In terms of production capacity, US renewable diesel production capacity expanded by 920 million gallons in 2023, an increase of more than 30 per cent. According to NOPA crushing consumption data, the amount of soybeans crushed in the United States in the first eight months of 2024 (September 2023 to April 2024) was 1.474 billion bushels, an increase of about 5.1 per cent year-on-year and well above the average of 1.406 billion bushels for the same period in the past five years.
Decline in export competitiveness of American beans. China imports more soybeans from Brazil.
From the perspective of the competitiveness of US soybean exports, although the global soybean supply and demand is developing in the direction of easing, due to the strong performance of US soybean demand, the ratio of US soybean inventory to consumption remains low, so the US soybean supply and demand still maintain a relatively tight balance. At present, the global soybean international trade is based on CBOT soybean futures price + premium pricing. As the supply and demand of Meidou itself is difficult to say loose, so the competitiveness of US export price is weak.
China is the world's largest importer of soybeans. In the past three years, China has imported more than 100 million tons of soybeans annually, accounting for about 62% of the total global trade. Take the June shipping soybeans exported to China this year as an example. The discounted price of US Bay to shore is about 230cents / bushel, which translates to 4378 yuan / ton for soybeans arriving at Hong Kong. Brazil's quoted price for landed liter is 160cents / bushel, which translates to 4172 yuan / ton for soybeans arriving at Hong Kong. Argentina's discounted price for landed liter is 165cents / bushel, which translates to 4185 yuan / ton for soybeans. Obviously, for the buyer, the price of American beans is not attractive enough. Our country imports more soybeans from Brazil.
Another key factor affecting imported soybeans is the exchange rate. China is the most important buyer of soybeans in the world, and the important basis for deciding whether our oil factories buy ships or not lies in the expected squeezing profits of oil factories. China's soybean import dutiable cost = CNF CIF price × (1 + tax rate) × (1 + value-added tax rate) × RMB exchange rate, the exchange rate rise will directly lead to the increase of China's soybean import cost, thus affecting the crushing profits of oil factories, and then affecting the enthusiasm of China's soybean imports. Take the import cost of American soybean in June as an example, if the exchange rate of US dollar against RMB rises from 7.1 to 7.2, then the cost of China's soybean import will increase by about 60 yuan per ton.
It is inevitable that the weather of beautiful beans will rise. Domestic soybean meal may break through and rise in July.
From the perspective of the international soybean market, although the high yield and harvest of South American soybean is listed on the market, which squeezes out the export share of American soybean to a certain extent, which forms a strong pressure on the price of CBOT soybean, the recent rainfall in southern Brazil has affected soybean yield, harvest and shipping, and the negative side of high yield of South American soybean has also been weakened. The decline in American bean exports is more due to the strong domestic demand of American beans, and the United States even imported some soybeans from Brazil at the beginning of this year. At present, the price of CBOT soybean is near the planting cost line, and there is a high probability of La Nina from June to August, when the weather rising water trade of beautiful beans may be inevitable.
From a macro point of view, although the United States CPI fell back in April, but the overall rebound in PPI, production costs will eventually be transmitted to consumption, will also form a certain support to the US bean disk. On the whole, the probability of bottom rebound of CBOT soybean in the later stage is higher.
From the perspective of China's soybean meal market, it is expected that there are more soybean imports into Hong Kong from May to June, and the demand for soybean meal is also improving month-on-month, but the supply increment is greater than the demand increment, resulting in the accumulation of soybean and soybean meal inventory. It is expected that there may be a pullback in soybean meal prices from May to June. After entering July, the demand gradually reached the peak of the year, the domestic soybean meal is also expected to resonate with the weather rising water trading of US beans, and the price may break through and rise.
