Rapeseed Gains Momentum on Euronext While Soybean Markets Face Trade War Fears

Rapeseed Recovers on Euronext; Soybean Market Faces Challenges in Chicago

Euronext Rapeseed Market

• Price Movement:
  • Rapeseed prices continued their recovery for a third consecutive session on Monday. The February contract gained €5, closing at €508.25 per ton.
• Support Factors:
  • A weaker euro and rising canola prices in Canada provided significant support.
• Limiting Factors:
  • Declining palm oil prices in Malaysia and strong harvest projections for South American soybeans curbed potential gains.
• Forecast Updates:
  • Brazilian consultancy Celeres revised its soybean production forecast to 170.8 million tons, nearly 1 million tons higher than its earlier estimate.
  • Agroconsult predicts an even larger output of 172.2 million tons, 10 million tons above the 2022/23 record, citing favourable weather conditions.

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Chicago Soybean Complex

• Price Movement:
  • The January soybean contract fell by 4.25 cents, closing at 985.25 cents per bushel (€362/ton).
• Challenges:
  • Persistent fears of a U.S.-China trade war exerted downward pressure on prices.
• Support Factors:
  • Robust domestic demand provided a cushion, with U.S. oil mills processing a record 215.76 million bushels of soybeans in October.
  • This exceeded trade expectations (210.9 million bushels) and marked a 15.7% increase from September and a 7.15% rise from October 2023.
• Soybean Oil Stocks:
  • Inventories decreased by 1.1% year-on-year and month-on-month, reaching 673.85 million kg.

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Export and Inspection Highlights

• Weekly Export Inspections:
  • The USDA reported inspections totalling 2.088 million tons for the week ending November 28.
  • This figure represents a 78% increase compared to the same week last year but was 1.4% lower than the previous week.
• Key Buyers:
  • China was the top importer with 952,095 tons, followed by Italy with 548,461 tons.
• Year-to-Date Performance:
  • Total soybean exports for the current marketing year reached 21.793 million tons, up 16.2% year over year and marking a four-year high.
• Private Sales:
  • The USDA reported selling 134,000 tons of soybeans to China for delivery in the 2024/25 marketing year.

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Investor Sentiment and CFTC Report

• Soybean Futures:
  • Net short positions in soybean futures and options increased by 13,771 contracts, reaching 81,472 as of November 26.
• Soybean Meal:
  • Net short positions surged to a near-record 75,416 contracts, highlighting bearish sentiment in this segment.

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Summary

While rapeseed markets show resilience, supported by a weaker euro and rising canola prices, the soybean complex faces challenges. Concerns over U.S.-China trade relations and mixed market dynamics continue to dominate. Domestic solid processing in the U.S. and robust Chinese demand remain bright spots, while investor sentiment remains cautious in soybean futures and meal markets.