Early USDA Report, Soybean Market Remained Cautious

External disk trend: Chicago Board of Trade (CBOT) soybean futures rose on Friday, while soybean meal fell. CBOT November soybean futures rose 9.8 cents to 1,329.25 cents per bushel, December soybean meal contract rose -3.6 dollars to 358.9 US dollars per short ton; December soybean oil contract rose 1.8 cents to 60.94 cents per pound.

Disk trend: ①A2109 closed at 5,959, 0.71% from the previous trading day, trading volume was 189,805 hands, open interest 95,881 hands, -1,947, A9-January spread -21; ②B2108 closed at 4,297, 1.06% compared to the previous trading day, The trading volume was 32,648 hands, the open interest was 10,371 hands, -1,701; ③M2109 closed at 3,590, 0.2% from the previous trading day, the trading volume was 1,075,229 hands, the open interest was 1,099,178 hands, -3,162 hands, the basis difference between Jiangsu spot and M2201 was 2, and M2109 Basis -30, M9-January spread of 32; ④Y2109 contract closed at 8,644, 1.38% from the previous trading day, with a trading volume of 807,356 hands, open interest 406,520 hands, -4,603, Y9-January spread of 382.

News: 1. The Brazilian Grain Exporters Association ANEC stated that Brazil’s soybean exports in July 2021 may reach between 7.64 million tons and 8 million tons, which is lower than the 8.03 million tons in July last year because most of Brazil’s soybeans have been exported. 2. Industry association Abiove predicts that Brazil's soybean exports in 2021 should reach 86.7 million tons. Due to strong demand from China, this estimate is raised by 1 million tons from June. As exports are expected to increase, the Brazilian Vegetable Oil Industry Association (Abiove) also lowered the country's final soybean stocks this year by 1 million tons to 4.16 million tons.

Market price: domestic soybean price is 5440. The price of soybean meal from oil plants in Zhangjiagang, Jiangsu: 3560,40. Zhangjiagang dealers quoted 9370. (Unit: Yuan/Ton)

Warehouse receipt inventory: Soybean 1 warehouse receipt 18,710 lots, -870 lots; Doudou second warehouse receipt 600 lots, 0 lots. Soybean meal warehouse receipts were 23,478 lots, 0; soybean oil warehouse receipts were 6,100 lots, 0 lots.

Main positions: The top 20 long positions of Soybean 1 2109 contracts are 65862, -1236, short positions 62165, -101, and the net positions are 3697; the top 20 long positions of Soybean 1 2108 contracts are 7520, -642, short positions 7336, -1032, and the net positions are 184. Soybean meal 2109 top 20 long positions 686726, -2698, short 835452, -367, net position -148726. The top 20 soybean oil 2109 contracts are long 267892, -4964, short 298469, 2541, and net position -30577. (Unit: hand).

View summary: Soybean 1: As the summer vacation and the graduation of fresh graduates are approaching, consumer demand in the school cafeteria is sluggish. Coupled with the low price of vegetables, the high price difference between soy products and vegetables also limits the demand for soybeans. At the same time, the price of pork is low, and the ratio and substitution effect of animal protein to vegetable protein is gradually emerging. The overall sluggish downstream demand has dragged down the price of domestic beans. At present, the source of soybeans in Northeast China mainly flows to the nearest storage and storage points. However, the State Reserve has lowered the soybean purchase price, and traders have insufficient confidence in the future soybean market, which also drags down the spot price. After June 30, the Russian soybean tariff will be adjusted from 30% to 20%, which is expected to have a certain impact on domestic soybeans. From a disk perspective, Soybean 1 has stabilized at the 60-day moving average, maintaining a volatile view for the time being.

Bean 2: According to the weekly crop growth report released by the United States Department of Agriculture (USDA), as of July 4, the flowering rate of soybeans in the United States was 29%, 14% last week, 29% last year, and a five-year average of 24%. The soybean pod setting rate is 3%, 2% in the same period last year, and the five-year average is 3%. The excellent and good rate of soybeans is 59%, and the market expects 60%, compared with 71% in the same period last year and 60% last week. The excellent and good rate of US soybeans has been lower than expected for four consecutive weeks, indicating that weather factors have a certain influence on growth. In Argentina, according to a report issued by the Argentine Ministry of Agriculture, as of June 30, Argentine farmers have sold 23.7 million tons of soybeans, an increase of 788,800 tons from a week ago. According to the Argentine Ministry of Agriculture, the pace of soybean sales lags behind the same period last year, when sales were 26.3 million tons. From the disk, the Dou Er rushed higher and fell, and the top focused on the pressure situation of the previous high of 4,400 yuan/ton.

Soybean meal: For US soybeans, the weather for US soybeans continues to have rain forecasts, which eases the pressure on US soybean planting. However, as soybeans enter a critical growth period, the market still has expectations that drought may affect US soybean production. The monthly supply and demand report of US soybeans will be announced tonight, and the market remained cautious before the report. At the domestic macro level, the central bank cuts the RRR. At present, the effect of boosting agricultural products is limited. Beans have risen and fallen, and their positions have also declined. From the perspective of soybean meal fundamentals, domestic soybean meal output decreased last week, feed farming companies were not motivated to pick up goods, and soybean meal stocks were basically stable. On July 5, the soybean meal inventory of major domestic oil plants was 1.14 million tons, basically the same as the same period last week, an increase of 280,000 tons over the same period last month, an increase of 120,000 tons over the same period last year, and an increase of 60,000 tons over the average of the same period in the past three years. . After August, the arrival of soybeans is expected to fall, and the supply pressure of soybean meal is expected to ease by then. On the demand side, the demand for soybean meal continues to stabilize under the inertial growth of pig production capacity. In the later stage, the focus will be on the cost support of US soybean prices to soybean meal. On the disk, soybean meal has risen and fallen, and it is supported at the 60-day moving average in the short term. The remaining long orders in the previous period will continue to be held.

Soybean oil: For US soybeans, the weather for US soybeans continues to have rain forecasts, which eases the pressure on US soybean planting. However, as soybeans enter a critical growth period, the market has expectations that drought may still affect US soybean production. The monthly supply and demand report of US soybeans will be announced tonight, and the market remained cautious before the report. At the domestic macro level, the central bank cuts the RRR. At present, the effect of boosting agricultural products is limited. Beans have risen and fallen, and their positions have also declined. From the perspective of oil and fat fundamentals, domestic soybean crush fell slightly last week, but the downstream delivery speed was slow, and soybean oil stocks continued to rise. Monitoring shows that on July 5, the soybean oil inventory of major oil plants in the country was 870,000 tons, an increase of 20,000 tons on a week-on-week basis, an increase of 110,000 tons on a month-on-month basis, a decrease of 320,000 tons year-on-year, and a decrease of 530,000 tons from the average of the same period in the past three years. Although soybean oil stocks continue to rise, they are still at a relatively low level, limiting the downside of oil. Regarding palm oil, strong exports in early July provided support to the market. The Indian government announced that the import duty on crude palm oil will be reduced from 15% to 10%. The new tariff will take effect on June 30 for a period of three months. India is the world's largest importer of vegetable oil, and this tax cut is expected to expand palm oil imports. From a disk perspective, soybean oil rushed higher and fell back. It fluctuated at the 60-day moving average in the short term, and the remaining long orders continued to be held in the early period.

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