• The USDA has released its monthly demand and supply projections for vegetable oils. The USDA has tweaked its forecast of US soybean production for 2021E/2022F by 1.5% to 4,339mil bushels from 4,405mil bushels due to a lower yield of 50 bushels per acre vs. 50.8 bushels per acre originally. However, US soybean inventory estimate is unchanged at 155mil bushels as the USDA has raised the beginning inventory to 160mil bushels from 135mil bushels.

• The USDA has also raised its forecast of global soybean inventory for 2021E/2022F to 96.2mil tonnes from 94.5mil tonnes. This is due to higher stockpiles in China. The USDA did not revise its projections of soybean production in Brazil and Argentina. Soybean output in Brazil is envisaged to increase to 144mil tonnes in 2021E/2022F from 137mil tonnes in 2020/2021E. Soybean production in Argentina is expected to expand to 52mil tonnes in 2021E/2022F from 46mil tonnes in 2020/2021E.

• Reuters cited customs data as showing that China’s soybean imports fell in July from the same period last year as poor crushing margins weighed on demand. China bought 8.67mil tonnes of soybeans in July, down 14.1% from 10.09mil tonnes in the previous year. In the first seven months of the year, soybean shipments amounted to 57.63mil tonnes, up 4.5% from the same period last year. Industry experts said that China’s soybean demand is expected to slow down in the rest of the year as falling hog margins and more wheat substitution in feed have crimped the appetite for soybean meal.

• According to Bloomberg, Cargill Inc has reported its biggest profit in its 156-year history. Cargill had almost US$5bil in net income in its 2021 fiscal year through the end of May. Cargill has profited from surging consumption of meat, corn and soybeans, particularly from China. The strong demand has sent agricultural markets skyrocketing, boosting profits for commodity producers and traders.

• S&P Global Platts reported that Argentina and Brazil’s FOB soybean oil basis levels have risen to more than a two-month high amid steady demand for exports and local biodiesel blending as well as transportation bottlenecks in the Parana River. The Argentinian FOB Up River soybean oil basis for September shipments was assessed to be minus 500 points to the correspondent CBOT contract. It was the highest level for front month loading since minus 500 points on 27 May and minus 1,500 points on 9 to 10 June. In Argentina, a resurgence in export demand for soybean oil and biodiesel, although at a slow pace, have been supportive.

• According to S&P Global Platts also, India’s palm oil purchases picked up in August, with most of the new orders going to Indonesia instead of Malaysia after Jakarta’s export duty cut on CPO made it cheaper for Indian buyers. Some traders said that India’s order pipeline looks strong for now but the demand uptick has been complicated by sky-high freight rates and unavailability of ships. A source said that the shortage of vessels has been a problem since July and has pushed up freight costs by around US$6/tonne.

Source: AmInvest Research - 16 Aug 2021