• The USDA has released its monthly demand and supply projections for world vegetable oils. The USDA has raised its forecast of 2019E/2020F US ending soybean inventory by 3.3% to 475mil from 460mil bushels due to a drop in crushing activities. Comparing 2019E/2020F against 2018/2019E, US soybean production is expected to fall by 19.8% to 3,550mil from 4,428mil bushels dragged by lower yields and planting areas. Globally, ending soybean inventories were raised marginally to 95.42mil from 95.21mil tonnes for 2019E/2020F due to the increase in US stockpiles.

• The USDA has forecast world soybean production to fall by 6.0% to 336.56mil tonnes in 2019E/2020F from 358.21mil tonnes in 2018/2019E mainly dragged by a 19.8% decline in US soybean production. The US is expected to account for 28.7% of world soybean production in 2019E/2020F while Brazil is anticipated to account for another 36.5%. Argentina is envisaged to make up an additional 15.7% of world soybean production in 2019E/2020F.

• Bloomberg quoted sources as saying that international companies that process soybeans in China are behind the US export sales designated as going to unknown destinations. Foreign companies with crushing facilities in China are given waivers to import US soybeans without tariffs. When they make purchases via their American offices, the destination is declared as unknown. This is because the cargoes could be redirected to other places if price changes make the deal uneconomical. Cargill Inc, Louis Dreyfus Co and Bunge Ltd have soybean crushing facilities in China.

• Bloomberg also reported that Indonesia may begin B30 trials in November or December2019. An official with the Indonesia Biofuel Producers Association said that the B30 trial may consume 400,000 kiloliters (348,432 tonnes) of palm biodiesel. The public trial is needed to make sure the distribution, transportation and storage of biodiesel run smoothly when B30 is officially implemented in 2020F.

• According to Reuters, Chinese importers made new purchases of US soybeans last week even as two million tonnes of American cargoes were waiting to be offload at the ports in China. Chinese crushers bought up to seven cargoes of US soybeans for deliveries in December 2019 and January 2020 as US prices were competitive relative to the prices in South America. Almost all of the US soybeans at the main ports in China are destined for state reserves. However, storage for state reserves is limited. An industry player said that older soybeans would be moved out for crushing when new soybeans are brought in.

• Reuters reported that the murder of two Indonesian palm activists that police said was ordered by a palm oil businessman, highlights the escalating violence and threats faced by environmentalists. A few weeks ago, two Indonesian palm activists were found dead with multiple stab wounds near a palm oil plantation in North Sumatra. Environmental campaigners and media watchdogs said that the two men were former journalists, who had been involved in a dispute between the palm oil company that operated the land and local residents. Police has arrested the head of the Amelia palm oil company on suspicion of having paid several men about US$3,000 to kill the activists.

Source: AmInvest Research - 18 Nov 2019