Source: lujiazui bulk commodities BBS
【Investment point】
In July, the USDA monthly supply and demandγ×☆ report reduced the total area planted and h αarvested, unit yield, total output, endin♦₹π≤g inventory and inventory consumption ratio of U∞ε☆≠.S. soybeans for 209/20, ©♣✔ thereby reducing global sφ>"§oybean production, ending invenσπtory and inventory conα€α∑sumption ratio for 209/20.
In our view, the USDA ↑'↕↔adjustment to the soybean ba★®←lance sheet itself has a positive impact, wh≠>→ich would have been overwhelmingly positive in ✔↕previous years (before the trade friction&•↕§ between the United States and Chε §ina), often leading to significant×✔ price spikes. U.S. bean prices have risen only ®¶slightly this year, largely because of wor <ries about trade friπ<ction with China. For the domes™φ✘♠tic market, the current tra÷₹∞ ding focus is also on demand concerns, the ↕♣™↓recent outbreak of Africa©'σn swine fever in two lakes and other regions ma☆ ←βkes the market again tra♦↓×₩de the logic of "weak demand".
Overall, we are not ≤→pessimistic about theβγ beans market, given the potential for a signifi↑∞€✘cant contraction on the supply ♠♣ side, and expect there t♥αo be limited room below prices.For domestic beans, the fβ∞ocus is on stabilizing or improving d₽ ☆emand. As for us beans, in additio↔♦"n to sino-us trade issues, the weather conditions•ε in the key growing season of us beans are mainl>₩y concerned.
August USDA monthly s≈®≈upply and demand report released at midnight σ♥Beijing time on August 13. We will make an an& £↑alysis based on the latest₽₽ situation.
We are interpreting the late✘$st Estimates on global soybean Supply andDema¥<nd released by the us dπ<₹epartment of agriculture at midnighφ$t on July 12, 2019.
1. July USDA monthly s©Ω& upply and demand report (b♦₩eans) adjustment
1.1Soybean balance sheet: globa♦✔£δl soybean production, invenλ↓φtory, inventory consumptiβ£on ratio and other la→↔ λrge downward impact much
The July 2019 world agricultural supp×Ωly and demand report (WASDE) has↔® adjusted the key items of the new global ♣βand major country soybean balance sheet foσ¶<εr 2019/20 as follows:
1、Production: global soybe© λan production is estimated at 347.04 million ↑•tons, down 8.35 million tons from€¶≥ June. Among them, the U.S. soybe↓₽an output was 104.64 million tons, <♠down 8.31 million tons from June and dowσ ∞♥n 19.2 million tons from 2018/19. ←←There was no adjustment in soybean production i∑₹÷n major producers such<∑ as Brazil, Argentina and China. Th↕λe big drop in U.S. soybeaα¶n production was largely due to lower acre±Ωage and yield per unit area: 80 million acres±∏ in 2019 was projected in th§♣e July report, down from 84.6 million acres i₽π♣©n the June USDA supply and demand reportδ≠>, and essentially unchanged from 8<↓™0.4 million acres in the USDA's αλ"intention report at the end of June. The 2019÷≈ harvest was 79.3 million acr↓'es, also below the 83.8 million acres fore₽∞cast in the June USDA supply and demand repo♥ rt and essentially unchan∏♦ged from the 79.26 m₹σσillion acres forecast in the USDA's¶★ end-june intention report. In ad✘♦λdition, the July USDA supply and demand report p↓∞rojected a yield of 48.5 cattle↕δ★>s per acre in 2019, down from 49.5 cattles per Ωacre in June.
2、Consumption: global soε÷✔ybean consumption was ®≠355.06 million tons, 250,000 tons lower t¥☆φ↔han the estimate in Juσ∑$ne. Soybean consumption in the United S↑→↔tates, Brazil, Argentina and≠¥ China was unchanged from June estimates.
3、Exports: global soybean exports were×β 1512.6 million tons, up 210,000 tons from ∏±™βJune estimates. Among them, the U.S. soybean e¶σxport was 51.03 million tons, down 2.04ε☆ million tons from June's estimate, Brazil's soyb₩βean export was increased by 1 millio∑✔§πn tons to 76 million tons, and Argent∏ε∑®ina's soybean export was increased "β≠by 1 million tons to 8 milΩ±×₽lion tons. As a result, the adjustment still©≥¥ reflects the impact of trade ≥★♠friction between China and×→ the United States, the United State$×←αs soybean exports down ∑Ω≤≈and Brazil and ArgenΩ©$¶tina soybean exports α>up.
4、Ending inventory: global en★★♦ding inventory of 104.53 million tons, 8.13 milliΩ↓on tons lower than t§♠™he estimate in June.©Ω±♥ Among them, the us cut 6.82 milliΩ↑≤↔on tons to 21.63 million tons, Brazil cut 25"&0,000 tons to 27.45 million tons, Argentina cut×♥> 1 million tons to 26.2 million tons, an™↔&d China kept 21.37 million tons unchanged. The±∞☆refore, the sharp decline of global soybean endin¥♣g stocks this time is mainly'♣ caused by the sharp decline of us so₩€ybean ending stocks.
5、Inventory consumption ratio: global s↑δ↕↑oybean inventory consumption ratio♥® was 29.44%, down 2.27% fromδ↔≈Ω June estimates and 3.06% from ♥γ2018/19. Among the world's major soybean prodβ>ucers and consumers, the U.S. saw a sharp reducti×≈₹on in the ratio of soybean stocks t₽π÷o consumption, from 46.57 percent in Jun βe to 35.41 percent now.
1.2Soybean meal balance sheet: 209/2¥ ↔∑0 production, inventory, and invent÷γ§ory consumption ratio∏£$ are all reduced with δ" positive impact
The July USDA supply and demand report low↔✘☆ered key data for 2019/20 on→↔≠ global soybean meal &♥initial stocks, production, ending₽©> stocks and inventory£₩♦-to-consumption ratios, wh¥®ich had a positive impact.Among the major producers and consumers in the wβ×"✘orld, the ending inventory and inven↓ ₽¶tory consumption ratio ∞£of Argentine soybean meal were← ¥ both reduced. The ending inventory of Argentine ♠™soybean meal in 2019/2✘α0 was 2.89 million tons, •♣β250,000 tons lower than the estimate in JuneΩ♣©. Argentina's soybean meal inventory consumptionεφ→ ratio was 87.58 percent, down 7.57 percent fr★φ↑om June estimates.
1.3Soybean oil balance sheet: 2019/20 endi≤×ng inventory and inventory consumption∞≤♠λ ratio slightly upward impac♠'ε♦t slightly short
In July, the USDA supply and demand report&±₩ slightly reduced global soybean oil pr∑™≥oduction in 2019/2020•₽, but the demand also decreased, thus endin↑↔≈g inventory and inventλ€ory consumption rati↔αo increased slightly, the impact was slightlyΩ✘¥¶ negative.Global ending stocks of soybean oil in£δΩ 2019/20 totaled 3.57 million tons, up 50,000∏& tons from June and down 60,000 t→Ωons from 2018/19. Among the world's le↕™ading producers, Brazil's soy↓↓ ®oil ending stocks were slightly♦✘γ£ increased by 20,000 tons to 340,000 ton&s, Argentina's by 50,000 tons<✔ to 390,000 tons, and the us, China and Ind>≤λia's ended stocks were unchanged. Global soybe↕π'↔an oil inventory consu∑↔≤×mption in 2019/20 was 6.25 perc♦σ✔ent, up 0.12 percent from the June forecast and €down 0.26 percent from 2018/←≥19. The adjustment was mainly made by Brazil and ↓≤<Argentina: Brazilian soybean oil endin± g inventory consumption increased by 0.2•σ8% from June to 4.72%♥←. Argentina's ending stocks of soyoil ✘✘were 13.73 per cent h☆αigher than in June, up 2.9 per cent, whil÷←e the ratio of consumption of soyoil st®ocks in the us, China and India was unchange÷"↓d.
2. The report reviews
In July, the USDA monthly supply and demand repo$∑rt reduced the total area planted and ha☆rvested, unit yield, total outש↑βput, ending inventory and inventory consumption r ←$atio of U.S. soybeans for 209/20, thereby redu♥→>¶cing global soybean production, ending inventor Ω≤≥y and inventory consumption ratio for 209/20.
In our view, the USDA adjustment to thβγe soybean balance sheet itself has∑× a positive impact, which would★ have been overwhelmingly positive in previous ye₩σσars (before the trade frict€&≈ion between the United States and China), often l₩λeading to significant price spike'φs. U.S. bean prices have≠"₽ risen only slightly this yα¥δ±ear, largely because of worries aβφ¶bout trade friction with Chin< 'a. For the domestic market, the curren'$•t trading focus is also on demand×™ concerns, the recent outbreak ofδ African swine fever in two lakes and oth∏♦∏er regions makes the market again trade the logi®∑∑c of "weak demand".
Overall, we are not pes± ≤™simistic about the beans market, give←"n the potential for a significant contraction♥©"₩ on the supply side, and expect there →♦™←to be limited room below prices.For domestic beans, the ↕$φfocus is on stabilizin♥"><g or improving demand. As>✔☆ for us beans, in addition to sino-us trade issue↔↕Ωs, the weather conditions in the key g✘≤∞rowing season of us beans are mainly concerned.
August USDA monthly supply∏♠≤✔ and demand report released φσγat midnight Beijing time, we will make an analysi©πΩ♣s based on the latest situation.
