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Section 1 : CPO Price Trend:
Brazil, Argentina and US Soybean Outlook 2020
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World soybean production is set for another volatile year in 2020. South American producers will continue to consolidate their position as the leading force behind global soybean production, as the impacts of the U.S.-China trade war, Asian Swine Fever and a poor 2019/20 U.S. crop favor producers in Brazil, Argentina and Paraguay.
Initial outlooks of the South American 2019/20 crops also seem very promising. Despite a few weather-related, early-season concerns, Brazil is posed for record sowings and production, while Argentina is seeing a boost in area after new tariffs on cereals made soy an even more competitive crop. Paraguay, the world’s fourth largest exporter, will also see area increases and is currently enjoying favorable weather conditions. While U.S. farmers are likely to plant more grain and oilseed acres than last season, current conditions are ripe for corn to stay ahead of soy in 2020/21, if weather cooperates during plantings.
This paper will dive into the details of current South American crop expectations, including current season weather forecasts, as well as a look ahead at the 2020/21 U.S. soybean crop acreage and weather forecasts.
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Section 1 : CPO Price Trend |
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MITIGATING THE NEXT WAVE OF MARKET UNCERTAINTIES Nov 14, '22 ~ Nov 18, '22 |
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ASSESSING 2022: MANAGING OPPORTUNITIES AND RISKS Mar 28, '22 ~ Apr 01, '22 |
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Section 2: Opportunities for Palm Oil in Asian Market Oct 18, '21 ~ Oct 24, '21 |
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Section 1: Price Direction Apr 05, '21 ~ Apr 11, '21 |
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Section 2 : Special Focus on the US Apr 05, '21 ~ Apr 11, '21 |
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Section 1 : CPO Price Trend Feb 24, '20 ~ Mar 01, '20 |
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Section 1 : CPO Price Trend Aug 19, '19 ~ Aug 25, '19 |
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Section 1: CPO Price Trend Aug 06, '18 ~ Aug 12, '18 |
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Section 1: CPO Price Trend Jan 29, '18 ~ Feb 04, '18 |
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Section 2: Regional Focus : CIS Countries Aug 21, '17 ~ Aug 27, '17 |
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Section 1: Palm Oil Price Fundamentals Aug 21, '17 ~ Aug 27, '17 |
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Section 2: Market Challenges and Opportunities Feb 20, '17 ~ Feb 26, '17 |
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Section 1: Price Directions Feb 20, '17 ~ Feb 26, '17 |
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2016 Market Direction - Twists and Turns of Palm Oil Prices Feb 22, '16 ~ Feb 29, '16 |
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Second Half 2015 - Anticipating Market Price Direction Aug 17, '15 ~ Aug 23, '15 |
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Special Focus: Indian Sub-Continent Aug 17, '15 ~ Aug 23, '15 |
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Opportunities, Challenges And Trend In 2015 CPO Price Feb 23, '15 ~ Mar 01, '15 |
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2nd Half 2014: Market Challenges, Predictions And Directions Aug 25, '14 ~ Aug 31, '14 |
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Anticipating 2014 Palm Oil Price Direction Feb 17, '14 ~ Feb 24, '14 |
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Prospects For Second Half Of 2013 - Managing Price Fluctuations Jul 22, '13 ~ Jul 29, '13 |
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Mapping The Palm Oil Price - 2013 Market Perspective Feb 18, '13 ~ Feb 27, '13 |
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Palm Oil : Challenges, Opportunities And Latest Market Directions Aug 06, '12 ~ Aug 17, '12 |
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2012 Price Direction, Issues & Challenges Feb 13, '12 ~ Feb 20, '12 |
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Challenges, Opportunities And Latest Price Trend Aug 08, '11 ~ Aug 16, '11 |
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Challenges, Opportunities And Price Direction Feb 07, '11 ~ Feb 17, '11 |
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2010 Year End Prospects - What Lies Ahead? Aug 02, '10 ~ Aug 08, '10 |
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The biggest topic for now, is related to the potential lifting of the 2006 Amazon Soy Moratorium (ASM), which bans trade of soybeans on land cleared after 2008. The ASM was established by Brazilian soybean traders and has wide market approval from major Brazilian and international market participants, all of which have lobbied the Brazilian government in recent months to maintain the ASM, as farmer groups in Brazil lobby to have the restrictions lifted. In recent years, the Brazilian government has levied hefty fines (totaling in the tens of millions of USD) to companies and producers who violate the ban, but give that the current administration is very pro-farmer, the risk is for the measures aimed at reducing the environmental impacts Brazils soy sector to weaken. At this stage, the actions taken by international market players seem limited, given how concentrated the market is around South American and U.S. soy production. To my knowledge, there are not large, similar initiatives to curb deforestation or other impacts taken in other major South American producers.
3 years ago
The ongoing trade saga is, unfortunately, still an open question. Wording in the Phase I commitments leaves many loopholes for the China purchase commitments to vary dramatically, putting a question on a surge in demand, leaving the market and farmers uncertain as to how high will soybean planting intentions will rise after the historically high prevented plantings in 2019/20. Hence, Soybean stocks at the end of 2020/21 will likely still be quite tight. While there will be a boost in acres from last year in the U.S., it will be relatively muted as we describe in the presentation. The likely ~18% increase in year-on-year production (assuming normal weather) will allow for a potential record crush, which is sustained by a likely increased domestic demand for edible oil and biodiesel. Moreover, the overall vegoils market continues strong, as demand from Southeast Asian countries remain fairly strong, and as concerns emerge on the size of the 2020 palm oil crop in Malaysia, Indonesia and Thailand due to dryness. However, despite the increased overall demand, downward pressure from a likely very healthy crop in South America will keep things in balance overall, and further not incentivize farmers to plant a large crop in the U.S. this season.
3 years ago