• The USDA (US Department of Agriculture) has released the Prospective Planting and Stocks Reports. US farmers will be planting more corn this year instead of soybean due to corn’s attractive prices. Recall that US soybean prices have been affected by ample global inventories and the trade war between the USA and China since last year.

• US farmers will be planting 92.8mil acres of corn this year compared with 89.1mil acres last year. They will also be planting 84.6mil acres of soybean in 2019F vs. 89.2mil acres in 2018. In spite of the 5.2% drop in soybean planted areas in the US, US soybean price fell as the Stocks Report showed a 28.7% surge in inventories. US soybean inventories stood at 2.7bil bushels as at 1 March 2019 compared with 2.1bil bushels as at 1 Mar 2018.

• According to Bloomberg, Argentina’s soybean harvest has been delayed due to late sowings and the cold weather. The Buenos Aires Grain Exchange reported that only 1.6% of the harvest have been collected so far compared with the average of 5.1% during the same period in the past five years. So far in March, agricultural trading companies have sold soybeans worth about US$56mil per day on the foreign exchange market vs. the five-year average of US$75mil per day.

• Bloomberg also reported that the White Paper on Felda will be discussed in the Malaysian Parliament in the second week of April. Tabling of the White Paper was delayed as the government had to take into account some legal issues. Felda needs minimum cash flows of RM1.5bil to boost the productivity of its own plantations and smallholders.

• Reuters cited an Indonesian government official as saying that the country may exit the Paris climate deal if the EU goes ahead with the plan to phase out palm-based biodiesel. Under the Paris climate deal, Indonesia has committed to reducing its greenhouse gas emissions unconditionally by 29% and conditionally by 41% by year 2030. Indonesia said that it is preparing to challenge the EU and its Renewable Energy Directive at the World Trade Organisation as soon as the directive is implemented. The government is also examining its relations with EU members that support the act.

• According to Reuters also, Chinese state-owned firms have bought 1.5mil tonnes of US soybeans in late March for shipments in July and August 2019. These bring China’s total purchases of the latest US soybean crop to about 12.7mil tonnes as at late March 2019 compared with more than 28.5mil tonnes during the same period last year.

Source: AmInvest Research - 8 Apr 2019