Energy markets, South American weather supporting soy complex futures
The Mar-22 soybean meal and oil contracts closed last week at $411.20 per short ton and $0.6527 per pound, respectively. Soybean meal is nearly identical to where it started the year while soybean oil futures are higher by almost $0.10 per pound (15.7 percent).
S&D and fundamental factors
As of last week, the Brazilian soybean harvest was 5 percent complete as drier weather allowed for good progress. Nonetheless, Brazil’s Farmsul is estimating soybean yields in Mato Grosso Do Sul will be around 20 percent below average. Deral, Parana’s forecasting department, has reduced its production estimate by 35 percent to 12.83 MMT.
Weather, macro indicators, and news
A significant rain event brought much-needed precipitation to the northern portion of Argentina. However, drought conditions in Brazil and ongoing dryness in Argentina are believed to have significantly reduced soybean production prospects.
Palm oil market dynamics are adding support to soybean oil prices as large global users may increase their dependence on substitutable oils like soybean and sunflower. Palm oil prices have continued to set new record highs over the last few weeks.