• The USDA (US Department of Agriculture) released its monthly demand and supply projections of vegetable oils last week. It has reduced its forecast of 2017F/2018F US soybean inventory marginally from 430mil to 425mil bushels. The downward revision was due to marginally lower production of 4.425bil bushels vs. 4.431bil bushels previously. Comparing 2017F/2018F against 2016/2017F, US soybean production is forecast to rise by 3% from 4.296bil to 4.425bil bushels. US soybean inventory is estimated to climb by 41.2% from 301mil bushels in 2016/2017F to 425mil bushels in 2017F/2018F.

• The USDA has raised its forecast of 2017F/2018F world soybean inventory by 1.9% due to higher production from Brazil. It increased its estimate of soybean production in Brazil from 107mil to 108mil tonnes for 2017F/2018F. Overall, world soybean inventory is expected to inch up by 1.7% from 96.28mil tonnes in 2016/2017F to 97.9mil tonnes in 2017F/2018F.

• Reuters cited Argentina's President Macri as saying that Argentina would appeal to the World Trade Organisation if the US Commerce Department followed through on the import duties on the country's biodiesel. Argentina has been trying to settle the trade dispute by negotiating a minimum price for its exports but no deal has been reached yet. However in an interview with Bloomberg, President Macri said that Argentina would be willing to impose a 15% export levy on its biodiesel shipments to the US to gain entry into the market. Argentina would also be willing to accept a quota on how much biodiesel it can export to the US. Recall that the US has proposed anti-dumping duties of up to 72.28% on biodiesel imports from Argentina.

• Bloomberg reported that Argentina's President Macri is pushing a bill that would allow farmers to recoup money from fertilizer purchases. The proposed legislation would make some fertiliser costs taxdeductible. The government wants to encourage corn plantings to prevent an over-reliance on soybeans. A government official said that too much plantings would risk creating environmental problems and a monoculture.

• Reuters reported that China will commit to buying more soybean during President Trump's visit to Beijing. An industry official said that Chinese soybean buyers will sign a letter of intent with the US Soybean Export Council committing to purchasing a certain volume of soybeans in the future. The volume under the new deal would be fewer than the 12.53mil tonnes committed during the July agreement and will reflect orders due to be signed in the current marketing year that were not included in July.

• In a conflicting development, Reuters said that Brazil is expected to win a larger share of China's soybean imports in the coming months, which would affect US exporters during the peak marketing season. China is expected to buy about five million tonnes of soybean from Brazil in 4Q2017, twice the 2.49mil tonnes shipped in 4Q2016. The October to December quarter is crucial for US exporters as it accounts for an average of 53% of full-year shipments in the past five years.

• It was also reported that Argentina will export at least 500,000 tonnes of biodiesel to the European Union (EU) in 2018F after the EU slashed the import duties. In the weeks since the tariff was reduced in late September 2017, Argentine producers have already shipped about 300,000 tonnes of biodiesel to the EU. Re-entering the EU market is crucial as US has proposed steep import duties on Argentine biodiesel imports.

• www.agriculture.com said that plantings of Brazilian soybean have jumped to 43% of estimated areas since 2 November 2017. In the previous week, plantings only reached 30% of the areas. According surveyor AgRural, rainfall in the centre-west region of Brazil allowed plantings to be expedited. However compared to previous years, the level of plantings is still slow. About 53% of soybean plantings were completed in the same period last year and 44% was the average in the past five years.

Source: AmInvest Research - 13 Nov 2017