Soybeans: Short - Term Upside Weakness, Long - Term Still Bullish

[main view] with only two weeks to go before the Spring Festival, there is limited scope for short-term bean prices to continue their downward testing, which may smooth the pre-holiday trading period. Due to the lack of reserve rotation soybeans in the New Year, it will be difficult for the market to see low prices in 2020, maintaining a long-term bullish view.

This week, soybean spot market calm, price stability than last week, the purchase and sales prices held steady. Short-term view that the spot market may be stable, but local may be affected by a small range of pre-holiday selling pressure, give up some of the gains.

Presales area each market has higher than the previous year's stock volume, mainly by the origin of the beans price rise, market traders "buy up do not buy down" obvious mood. Part of the market stock enough to consume after the Spring Festival, so before the Spring Festival, the price of beans stable after the market buying interest weakened, the main trade slowed down the pace of purchasing restricting the market of the origin.

China's shandong region in December, the monthly processing volume decreased significantly, mainly affected by the haze weather production limit requirements. The poor processing conditions of enterprises and the factory door prices are no longer raised, also calmed the rise of oil beans and protein beans.

Therefore, the agreement between China and the us on the text of the first phase of the economic and trade agreement will significantly benefit the export of us beans in 209/2020, which is likely to increase the export items of us beans in the New Year balance sheet, and the ending inventory of us beans will be further reduced.

Before the Chinese Spring Festival, the remaining time for soybean purchase and sales is limited, with only two weeks left. Although the trading body has more stocks, there is no large-scale concentrated selling, and the selling price of farmers has decreased, which is different from that of previous years. Heilongjiang provincial reserve purchase price, the heihe surrounding market prices form support.

Long-term perspective: due to the lack of reserve rotation soybeans in the New Year, it is difficult to see low-price soybeans in the market in 2020, and the expected decrease of national ending soybean stocks by 26.7%, the annual production is insufficient and the stock of old beans needs to be consumed. So, still maintain the previous bullish view.


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