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Soybeans: Why Outside The Weak Inside Strong

Sep 22, 2017

First, the continued "outside the strong within the weak" trend will continue to widen the internal and external prices have the need to amend.

Observation of the internal and external disk in recent months, the high point that the trend of domestic soybeans continued to be weaker than the outer disk. CBOT3 month contract and big continuous 1109 contract, for example, from November 2010 to February 2011, the outer disk 4-month highs were 1354.4,1404,1432.4,1455.6. The domestic are 4835,4625,4564,4610. CBOT soybeans for four consecutive months hit a new high, the domestic high of each month has been lower.

Inside and outside the disk continued to expand the spread of the need to amend. In early November 2010, the price of US soybeans and Dalian soybeans was 0. 27; in early February 2011, the price ratio of the two cities rose to 0.32, an increase of 15%.

Second, the international soybean "bullish factors" temporarily out of Brazil to increase production, and the new beans will soon be listed, negative factors gradually appear.

Early international soybeans rising is subject to a number of bullish factors, the current factors gradually fade into bad, CBOT continue to attack the kinetic energy shortage.

One of the most important is the South American soybean production for the body. In the early days, the Argentine soybean producing area was threatened by drought, and the output was kept down. The market was even worried that the country's soybean production would repeat the 2008 runoff and drop sharply, threatening the global supply of soybeans. In addition, when China's soybean import demand is huge, to promote international soybean continued upward.

While the recent South American soybean production is expected to subside. Mainly due to the Brazilian soybean production, while the Argentine soybean production rate is limited. February 9, the US Department of Agriculture (USDA) soybean supply and demand report forecast, raising Brazilian soybean production 1 million tons to 68.5 million tons; down Argentina soybean production 1 million tons to 49.5 million tons. Brazilian soybean to make up for the supply of Argentina soybean production gap.

Brazil's state supply company (Conab) said Wednesday that Brazil's soybean production in 2010/11 is expected to reach a record 70.1 million tonnes, up from 68.55 million tonnes projected in January.

South American new beans will soon be listed, negative factors to suppress the US soybean upstream.

Third, the domestic soybean due to long-term pressure, parity advantage began to show; In addition, before the spring, the policy will tend to encourage planting, suppress the possibility of soybean prices is very low.

It is understood that the current soybean port distribution price of about 4200 yuan per ton, while the domestic soybean into the factory price of 3900 per ton from top to bottom, domestic soybean has a parity advantage.

State Reserve soybean auction turnover rate continues to rise, also proved that domestic soybean began to be attractive. February 11, Heilongjiang storage soybean auction, plans to put about 80,000 tons, the actual turnover of about 60,000 tons, the turnover rate of 74.13%, the average transaction price of 3779 yuan / ton. This batch of 246,000 tons of Heilongjiang Lin Chu soybean is from December 2010 began to auction, in December had continued to shoot no turnover, in January this year, a slight increase in volume, to February, the batch of soybeans overall turnover rate has more than 8 to make. State Reserve soybean auction in good condition, in turn, increased market confidence, to promote Dalian soybean futures higher.

In addition, domestic policy is also an important factor. Analysis that the current environment, the policy to suppress the possibility of soybean prices is extremely low.