Will Ringrose, ADM Agriculture’s head of oilseeds, comments on the OSR market

Hemswell, Lincolnshire, 1 October 2020

USDA’s stock report on Wednesday took the market by surprise, with its soybean figure as of 1 September coming in 50 mln bushels below trade expectations (523 mln bushels vs average trade estimates of 576).

The figures for 2019 remained unchanged against trade expectations of an uplift. Soybeans reacted, funds bought back into the rally, taking beans 30 cents higher at the close with oil and meal following. 

US weather remains favourable, with some showers and cooler temperatures moving in, but harvest is progressing at a fast pace and is reported to be 20% complete at the start of the week. Crop ratings improved 1% to 64% good/excellent.

China was absent from the market for most of the week and started its “Golden Week” holiday on Thursday, so won’t return until the middle of next week.

Weather needs to be watched in South America, particularly Brazil. Persistent dry conditions could delay the planting of the 2021 soybean crop. 

Palm oil opened slightly higher at the start of the week, with the Malaysian government imposing movement restrictions on four regions which are large palm production areas, due to a rise in Covid-19 infections. Demand fears and outside market pressures are keeping prices suppressed in the short-term. 

In Canada, the weather is largely dry with temperatures above average, which will help harvest progress. Futures soared last night, following US markets. As of last week, harvest progress reached 50%, with yields in line with the three-year average. 

Matif rapeseed ended last week sharply lower until the release of last night’s USDA report. The market has largely followed US and world vegetable oil markets lower and now higher again. November futures were €15 off the recent highs at one point. 

EU coverage is still good until the new year. There has also been an improvement in the weather, with rain spreading across northern Europe, Baltics and Ukraine, which eased concerns in the short-term. 

In the UK, sterling remains a big influence. Brexit negotiations continue and further economic stimulus packages are being discussed, which makes for a very volatile market and is likely to do so for a while yet.