• Bloomberg reported that chemical management company, TMK Chemical has filed for an initial public offering on Malaysia’s exchange. The proposed IPO consists of 220mil new shares, representing 22% of the enlarged share capital. The price will be determined later. Dato’ Lee Soon Hian is currently the largest shareholder with a 50.6% stake. Dato’ Lee is the brother of Tan Sri Lee Oi Hian and Dato’ Lee Hau Hian, who are directors of KL Kepong.

• USDA has released its monthly demand and supply projections for vegetable oils, reducing its forecast of 2024E/2025F US soybean inventory to 435mil bushels from 455mil bushels due to lower carry-over stocks from the previous season and weaker production. USDA has revised its US soybean production downwards to 4,435mil from 4,450mil bushels as planted areas are now estimated to be 86.5mil acres vs. 86.1mil acres previously. Comparing 2024E/2025F against 2023/2024E, however, US soybean inventory is expected to climb by 26.1% to 435mil bushels from 345mil bushels.

• USDA has forecast global soybean inventory to increase by 14.8% to 127.8mil tonnes in 2024E/2025F from 111.3mil tonnes in 2023/2024E due to higher production in US, Argentina and Brazil. US soybean production is envisaged to expand by 6.5% to 120.7mil tonnes in 2024E/2025F while in Brazil, output is anticipated to increase by 10.5% to 169mil tonnes in spite of unfavourable weather conditions. Soybean production in Argentina is expected to inch up to 51mil tonnes in 2024E/2025F from 49.5mil tonnes in 2023/2024E.

• Global Times of China reported that the country will continue to diversify sources for soybean imports following its first soybean purchase from the US in 2024E, which came 7 months late. According to an industry expert, China’s soybean imports in 2024E are likely to remain stable or marginally higher with major sources coming from the Americas. He added that China still needs to import soybeans from US but the timeline of Chinese placing the orders would be the result of volatile US policy settings and risk management efforts taken by importers. In the first 5 months of the year, Brazil, the US, Canada, Russia and Argentina were China’s top 5 soybean importers in terms of value.

• NST reported that the Agriculture and Commodities Ministry is taking various efforts to ensure that the MSPO (Malaysian Sustainable Palm Oil) certification meets the requirements of the EU’s Forest Law Enforcement, Governance and Trade Regulation (EUDR). The efforts include the establishment of a Joint Task Force related to EUDR in collaboration with Indonesia, the Council of Palm Oil Producing Countries and the European Commission. Initial results showed that the MSPO has the potential to meet EUDR regulation requirements.

Source: AmInvest Research - 22 Jul 2024