Global supply tightening beans gains are hard to change

Since March, the price of domestic beans has risen following the external shock. Concerns such as the sharp decline in soybean production in South America and the forecast of a continuous decline in the US soybean area will continue to attract speculative funds. At the same time, the recent US economic data is bullish, and the Greek debt temporarily eased the European debt crisis to boost market optimism. The continuous soaring of CBOT soybean prices stimulated the upward movement of domestic soybean price shocks. The government work report of the two associations said that it will increase the minimum purchase price of wheat and continue the related preferential agricultural policies to further support the overall agricultural product policy. With the help of fundamentals, macroeconomics, and policies, beans market has been turbulent. Last week, both domestic and foreign varieties of soybean futures prices hit a new high since September last year, returning to the oscillating range that preceded last year's falling prices.

However, after the US soybean price surged this week, the domestic market also adjusted. In the short term, the bullish factors for the significant reduction in soybean production in South America have basically been digested during the continuous increase in the CBOT soybean price. North American planting area and weather speculation have not yet fully commenced. At the same time, after the delegation’s large-scale procurement last month, China’s procurement needs also No new profits have emerged, and US soybean export sales have begun to slow recently. In the short term, the fundamentals of the market will enter a vacuum period, and as the South American harvested soybeans in the new season are launched in April, the export of US beans will decline seasonally. Therefore, it is difficult for the fundamentals of the short-term US soybeans to have a substantial boost in the material and new factors. Since the end of January, the main contract of soybeans for CBOT has risen as high as 15%, and short-term adjustments are required after technology overbought. In addition, it should be noted that CBOT's new crop soybean corn contract price rebounded from a low of 1.8 in early November last year and has now reached 2.3 or above, within the mean range. With the return of soybean and corn prices to parity, the effect of price support weakened. The return of parity will prompt farmers to replant their planting decisions. This year, the decline in soybean plantings in the United States may be lower than previously expected.

In general, however, the sharp decline in production in South America has led to a tight global soybean supply and the prospect of North America's planting area and weather speculation peak in the coming period. The long-term trend of the domestic and foreign legume market will remain relatively strong. The U.S. Department of Agriculture has reduced the South American soybean production for three consecutive months. This month, the world’s 11/12 soybean production is forecast to fall to 245.1 million tons, a three-year low, which is a decrease of 19% over the previous year, a decrease of over 7%. A record high. At the same time, it is forecasted that the global soybean ending stocks will be reduced to 57.3 million tons, and it will also hit a three-year low, which is a year-on-year decline of approximately 11.5 million tons. This year, the annual decline in the area ratio of soybeans between China and the United States has also become an indisputable fact. Therefore, the tight global soybean supply pattern will continue to provide strong fundamental support for soybean prices at home and abroad, and short-term adjustments will hardly change the long-term upward trend. On the domestic front, after entering April, the demand for feed will recover and the stock demand before the “May 1st” holiday will come. It will also begin to provide domestic fundamental support.

The fundamental focus of the beans market in the latter part of the period will be the results of the US Department of Agriculture’s Planting Intentions Report, which will be announced on March 30. The first results of US farmers' planting intentions based on field surveys will be announced at that time. At the same time, we continue to pay attention to the domestic demand for feed, soybean procurement, and so on. It is expected that before the end of the month, the domestic and foreign beans market will be fluctuated at a high level, after which North American weather speculation officially kicks off. After a sharp reduction in production in South America, if there are any adverse conditions in North American weather, the global soybean market supply will further tighten. Therefore, the fundamentals look at the late beans market is easy to rise and fall, short-term adjustment is still difficult to change the long-term rising trend.