- Last week, soybean prices rose on the back of a 5.8% increase in soybean crushing activities in US. Also, there were concerns that heavy rains in Argentina may delay harvesting.

- In addition, Bloomberg cited an industry player as saying that soybean crushing activities in China are improving. China National Grain and Oils Information Center said that more than 45% of China’s soybean crushing capacity was used last week from 40% in the previous week.

- Soybean crushing margins were about 100 Yuan/tonne in the southern province of Guangdong, which was the highest in six months. Inventory of soybeans at the major ports in China amounted to almost 4.5mil tonnes in the past two weeks.

- In South America, soybean production costs are rising. In Brazil, Bloomberg quoted an industry expert as saying that the total cost of soybean production increased by 11% YoY in March in Mato Grosso due to the Real’s depreciation against the U$.

- Fertiliser prices climbed by 21% YoY in March while pesticide prices expanded by 33%. Brazilian farmers are delaying fertiliser purchases due to the higher prices and tighter credit.

- Oil World estimates that biodiesel production in Indonesia would amount to 3mil tonnes this year. This is expected to be 9.1% of Indonesia’s CPO production of 33mil tonnes in 2015F.

- Out of the 3mil tonnes, about 2.2mil tonnes will be for domestic consumption while the balance 0.8mil tonnes will be exported.

- Full implementation of B15 is expected to involve usage of 4.8mil tonnes of palm oil while B10 was supposed to absorb 3.2mil tonnes of palm oil from the system.

- Due to B15, Oil World expects Indonesia’s palm oil exports to fall to 22.8mil tonnes in 2015F, which is the first time in five years. Indonesia exported 22.95mil tonnes of palm oil products in 2014.

Source: AmeSecurities Research - 20 Apr 2015