• Bloomberg cited CREA Group, which represents the farming business in Argentina, as saying that Argentine farmers may lose US$2.15bil due to the impact of a drought. A recent survey of CREA members showed that 67% of the fields had a deficit of water in the soil while only 33% reported normal conditions. CREA added that the next few days will be key for the yield development of the crops. Industry experts have been reducing their forecast of soybean production in Argentina recently due to the drought. The USDA (US Department of Agriculture) is currently estimating Argentina's soybean output to be 54mil tonnes in 2017/2018F vs. 57.8mil tonnes in 2016/2017.

• According to Reuters, Bursa Malaysia said sellers of CPO futures who want to be involved in physical deliveries must now provide traceability details up to the palm oil mill's location. Crude palm oil sellers should submit traceability documents to port tank installations approved by Bursa Malaysia Derivatives. The traceability documents must state the name of the parent company, mill address and coordinates and quantity of CPO received.

• According to UK Agro Consult, China's imports of US soybeans fell by 14% YoY in January 2018 as China switched to soybeans from Brazil. Brazil sold 2.07mil tonnes of soybeans to China in January 2018, up a whopping 720% YoY. About 67% of China's soybean imports came from the USA in January 2018 vs. 88.5% in January 2017. Recently, there have been news reports that China would retaliate against the USA's soybeans if Washington imposes tariffs on steel and aluminium products from China.

• In a related development, Reuters reported that the USDA has issued grower and exporter guidelines to reduce poor quality soybean shipments after China tightened the import specifications. The move is intended to soothe rising tensions over agricultural trade between the two countries after a recent series of trade spats. The USDA guidelines cover a range of measures from how farmers should plant their soybean in the fields to how exporters should clean their grains before loading on the ships.

• Xinhua reported that the Indonesian government plans to issue a presidential decree for stopping expansion of oil palm plantation and increasing productivity. A government official said that coordination and discussion would be held with ministries to draft the decree on the halt of new plantation estates and evaluation of the existing licences. Also currently, the productivity of the oil palm tree in Indonesia is only two to four tonnes of oil per ha in Indonesia. The government plans to double it to eight tonnes of oil per ha.

• Intertek reported that Malaysia's palm oil shipments rose by 5% in the first 25 days of February compared with the same period in January. Crude palm oil accounted for 34.8% of exports while RBD palm olein made up another 21.8%. Exports of palm oil in crude form have been rising due to the recent abolishment of the export tax.

Source: AmInvest Research - 5 Mar 2018