The agents of the world soy market for another week turn their attention to the climate. This time, a fact of great proportion entered the radar: Hurricane Ida. The weather phenomenon, which has caused concerns for US logistics, is now among one of the factors that could affect oilseed prices.
Follow below the facts that should deserve the attention of the soybean market next week. The tips are from the analyst at Safras Consultoria, Luiz Fernando Gutierrez Roque.
- Soybean market players continue to pay attention to the climate on the North American producer belt to complete the development of crops and start harvesting work for the new crop. The market also assesses the situation of American ports hit by hurricane Ida this past week, with an eye on possible problems with the flow of grain from the new harvest. Signs of Chinese demand for US soybeans round out the factors;
- This past week was again one of more positive weather in the northern half of the US producer belt. Higher rainfall volumes were recorded in the states of North Dakota, South Dakota, Minnesota and Iowa, which must have been favorable for the final development of the plants, preventing a deterioration in the conditions of the soybean crops. This fact brought some negative pressure to the Chicago Stock Exchange;
- Faced with better weather conditions also in the previous week, the United States Department of Agriculture (USDA) indicated the maintenance of US crop conditions in its August 30 report. The trend now is that in its next weekly report, which will be released on Tuesday, the USDA will point to an improvement in conditions in some states and nationally, which could continue to weigh on Chicago;
- Despite this, the soybean market still has great doubts regarding the true productive potential of the new North American crop. Since the USDA’s August monthly report, crop conditions have worsened, which makes room for a cut in the production estimate in its next monthly report, which will be released on September 10th. This fact is supporting factor for Chicago, and the new number could bring great volatility after the release;
- Hurricane Ida hit several receiving plants and export structures along the southern Mississippi River, closer to the Gulf of Mexico. This is a key region for North American exports, which brings problems for the flow of grains, negatively impacting Chicago. There are doubts regarding the extent of the damage. It is important to keep up with news on the topic in the coming days, as the North American harvest is about to begin;
- New US soybean sales to China continue to be announced each week, which is a positive for Chicago. As we get closer to harvest, volumes are expected to grow. Only the absence of purchases may be surprising, as North American soybeans become more competitive with the beginning of the harvest.
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