Expected record crop in Brazil keeps soybean price in check, still robust demand in China

The wheat price in Chicago continued to gain on Friday and closed the week at 522 US cents per bushel. The lack of moisture in key US wheat-growing areas is still the dominant topic, while Thursday additionally saw the publication of weekly US export figures that turned out to be higher than anticipated. 

The soybean price likewise switched to an upwards trajectory on Friday, though at 887 US cents per bushel it remains well below the levels of over 900 US cents achieved mid-month. 

After a long period of excessively dry conditions, rainfall in some parts of Brazil's main soybean-growing areas now makes it more likely that another record crop will be harvested in Brazil again as forecast. In total, the 2015/16 crop even looks set to exceed the 100 million ton mark for the first time. 

"That said, only 31% of the acreage has been planted with soybeans in Brazil so far, which is considerably below the five-year average figure of 42%. There are also two sides to the latest prediction of Chinese soybean demand by the China National Grain and Oils Information Centre (CNGOIC)", says Commerzbank. 

It expects Chinese import demand to total 22 million tons in the fourth quarter, which would be 18% up on the year-on-year figure. Although this would not be as much as in the third quarter, it would doubtless apply primarily to US soybeans for seasonal reasons. That said, total soybean demand in 2015/16 is set to remain at the same level as last year, according to the CNGOIC.