• The USDA (US Department of Agriculture) has released its monthly demand and supply projections for vegetable oils. The department has raised its estimate for US soybean yield for 2019/2020F to 47.4 from 46.9 bushels per harvested acre. As such, US soybean production is now forecast to be 3,558mil bushels for 2019/2020F vs. 3,550mil bushels originally.
• The USDA has also raised world soybean inventory for 2019/2020F to 96.67mil from 96.4mil tonnes due to higher stockpiles in Brazil. Comparing 2019/2020F against 2018/2019 however, world soybean inventory is expected to decline by 12.3% to 96.67mil from 110.28mil tonnes. This is largely due to a 19.6% drop in US soybean production and 4.2% fall in soybean output in Argentina.

• Bloomberg reported that players in the US grains market are using technology to streamline barge trading. After the companies have gotten together to streamline shipping transactions and automate trade processes in grains and oilseeds, firms are now digitizing barge trading documents including bills of lading.

• The project is being directed and funded by the National Grain and Feed Association as well as companies such as Archer Daniels Midland, Bunge Co and Cargill Inc. The system will allow barge trading documentation to be transmitted electronically, increasing speed and efficiency without changing the way the market trades.

• iNews in the UK reported that the sugar tax has helped reduce sugar consumption in the country. A new study found that eight of the 10 biggest drinks manufacturers including CocaCola and Pepsi maker Britvic have reduced the sugar content of their drinks by at least 15% after a new sugar tax of 18p to 24p per litre was introduced in April 2018. Most of the reduction was due to drink manufacturers reformulating their products to make them less sweet and introducing new low-sugar beverages.

• According to Reuters, China has suspended its plan to implement a nationwide gasoline blend containing 10% ethanol this year following a sharp decline in the country’s corn inventory and limited production capacity for ethanol. The reversal is a blow to domestic producers and biofuel exporters such as the USA and Brazil, which were looking to benefit from China’s demand. Beijing’s E10 mandate was conceived as a way to digest the country’s huge corn reserves at that time. The USA exported 20% of its fuel ethanol to China in 2016. Since then, ethanol exports have slowed due to the US-China trade war.

• Reuters also reported that Malaysia is talking to the India government and trade officials to resolve concerns over India’s new palm oil import restrictions. On a positive note, Bangladesh’s farm minister said that his country is open to buying more palm oil from Malaysia if it offers competitive rates. Bangladesh buys palm products mainly from Indonesia currently

Source: AmInvest Research - 20 Jan 2020