Feed Ingredients Report: Week Ending Nov. 2, 2018
- U.S. processors crushed a larger-than-expected 160.779 million bushels of soybeans in September, the largest-ever processing volume for the month.
- China’s soybean imports are set to drop by a quarter in the last three months of 2018, their biggest fall in at least 12 years as buyer’s curb purchases amid the trade war and high domestic stockpiles.
- Corn harvest in the U.S. was as expected at 39% and still ahead of the 5-year average of 35%.
- Soybean harvest progress at 38% complete was near expectations, but behind the 5-year average of 53%.
- U.S. winter wheat planting is running slightly behind at 65% complete vs 67% on average, but improved weather is expected this week.
- U.S. weekly ethanol stocks clocked in at the second highest ever, despite weekly production falling below last year and last week to a 25-week low.
- Against a backdrop of record high global soybean stocks and prospects for large gains in 2019 South American soybean production, the market is unlikely to break out to the upside until a significant threat emerges to either Brazil or Argentine production or a resolution of the trade rift occurs. Argentina is offsetting its short crop by importing beans for crush and offering out meal at fire-sale prices.
- The world soybean price story is all about China. Although China is stubborn and committed, it seems improbable for China to go through another season uncompetitive with the rest of the world in pork production and risking the wrath of their people if negative events happen. Time exerts pressure and an ultimate settlement should be the end result.
Chinese soybean meal prices have risen to the highest levels for this time frame in the last 5 years, due to the U.S.-China trade war.