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19 tháng 1, 2024

Nhu Cầu Trung Quốc Suy Yếu China's Weakening Demand Could Pressure Soybean Prices

Soybean prices opened weakly this morning, hovering around the support level of 1220. In recent weeks, major news agencies and organizations have continuously provided negative forecasts for Brazil's soybean season. This was reflected in the USDA's reduced supply-demand projections released last weekend. However, this also indicates that the market has gradually adjusted to the adverse season in South America.


In the medium term, U.S. planting prospects are becoming more significant, particularly regarding the 2024 planting area figures. The price ratio between soybeans and new corn crops is currently 2.49/1, higher than the long-term average of 2.3. This ratio suggests that soybean prices are more attractive compared to corn, potentially motivating U.S. farmers to expand soybean planting. This is an important factor for investors holding long positions. According to our assessment, until the U.S. Planting Prospects report is released on March 31, the medium-term trend for soybeans is expected to lean towards selling.


Earlier this morning, the USDA released the weekly Export Inspections report, which had been delayed due to a system error. This report will impact the market later in the session. Specifically, soybean shipments for the previous week reached 1.26 million tons, improving from the previous week. However, the export pace this year remains significantly slower than last year, with only 47.46% of the target achieved so far.


Overall, U.S. soybean sales have been relatively weak over the past month amid the surplus of inexpensive Brazilian supplies. On the demand side, Chinese imports are expected to decline sharply in Q1 this year due to a decrease in pig herds and increased inventories after importing 99.41 million tons in 2023, the highest in three years. This could reinforce the selling pressure in the soybean market today.


Given that South American season outlooks have nearly been priced in, we expect soybean prices to experience a choppy trade today. Nonetheless, the weakening demand in China may exert short-term pressure and push prices down to the support level of 1220.


Source: MXV

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