Abstract: The trade war has not improved significantly, the US bean market continues to fluctuate at a low level, and South American new products soybean The sowing speed is accelerated. The domestic subsidy policy support makes the sowing area and output expected to continue to increase. In addition, soybeans are also planted along the Belt and Road, so the future supply is not a problem; Although the import of US soybeans has decreased, the total import of soybeans in China is still increasing, and due to the spread of African swine fever, the implementation of low protein standards and other factors, downstream demand has dropped significantly, so it is expected that the future price of soybeans in consecutive sessions will fall further.
1、 The trade war has not improved significantly, and the US soybean market has fluctuated at a low level
In October this year, US soybeans suffered from rainy weather, which hindered the harvest progress. At the same time, the market was also worried about the decline of yield estimates due to the decline of unit yield in some areas, which was the main reason why soybean prices fluctuated under the pressure of high yield. However, the export sales report released by the United States Department of Agriculture (USDA) shows that up to now, 6.173 million tons have been shipped in 2018/19, far lower than 1218.7 tons in the same period last year. The total export sales volume is 21.055 million tons, accounting for 38% of the estimated annual target, 49% lower than the same period last year, and 7.361 million tons lower than the same period last year. Among them, due to the impact of the trade war, China's purchase of soybeans from the United States has significantly decreased. The cumulative export to China this week was 203000 tons, with 825000 tons of unloaded soybeans, which is far from the 8.04 million tons of unloaded soybeans in the same period last year. The total export sales were 1.027 million tons, 13.411 million tons less than last year. On the whole, although the procurement of EU and other countries and regions increased by 6.05 million tons, it still could not fully cover the gap caused by the lack of demand in China. The progress of US soybean exports lagged behind the same period of previous years, and there is no driving force for US soybean growth at present. Moreover, the recently released USDA supply and demand report for November did not inject expectations into the results of the Sino US trade consultation, which also reflected that it was not optimistic about the results of the negotiations or that the process of negotiation would not be smooth. So far, the situation of the trade war has not improved significantly. Therefore, there is a high probability that US bean will continue to maintain a low level.
2、 Sowing in South America Accelerates Domestic Policy Support and Future Supply Continues to Increase
In terms of new production in Brazil, major information and forecasting institutions estimated the Brazilian soybean output between 119.5 million tons and 122 million tons, with an average estimated value of 120.7 million tons, and the USDA estimated it at 12.05 billion tons, both of which are higher than 11.98 billion tons in the same period last year, indicating that the current market is optimistic about the prospects of Brazilian production. Moreover, since the start of the sowing work, Brazil's soybean sowing work has progressed smoothly, and the good rainfall conditions have made the sowing progress the fastest in history. As of October 26, AgRural, a Brazilian consultancy, said that Brazil's soybean sowing had been completed by 34%, significantly higher than 20% of the same period last year and 18% of the five-year average. The meteorological model shows that the rainfall conditions in Brazil's soybean producing areas are still good at the end of October and the beginning of November. The main soybean producing areas are covered by rainfall and the rainfall is relatively average. The rainfall weather is very favorable for soybean sowing.
In terms of new crops in Argentina, the Argentine Ministry of Agriculture said that the sown area of Argentine soybeans in 2018/19 was expected to be 17.5 million hectares, higher than the 17.2 million hectares in 2017/18. Farmers began planting 2017/18 soybeans in November, and harvesting was carried out from March to June. The weekly report released by the Buenos Aires Grain Exchange said that as of October 24, 2% of Argentine soybeans were sown.
Then look at domestic soybean planting. In 2017, the country adjusted the target price policy for soybeans, implemented a market-based purchase plus subsidy mechanism, and improved the producer subsidy system to subsidize soybean producers and encourage more soybean planting. The intended planting area of high-quality edible soybeans in Heilongjiang, the main production area, increased to 3.4 million hm2, with a year-on-year increase of 280000 hm2, or 8.97%. In addition, the pilot farmland rotation system carried out since 2016 has also promoted soybean planting in Heilongjiang. Under the combined effect of policy guidance and market regulation, in 2017, the soybean planting area in Heilongjiang Province alone increased significantly by about 25% year on year, reaching 3.91 million hm2, and the recovery growth was close to the second highest level of planting area in the last 10 years. Nationwide, in 2017/18, China's soybean sown area was 8194000 hectares, 986000 hectares more than the previous year, an increase of 13.8%; The soybean yield per hectare is 1817 kg, an increase of 1.2% over the previous year; The total soybean output was 14.89 million tons, an increase of 1.95 million tons or 15.1% over the previous year. According to the data of relevant institutions, due to the official attention and preferential treatment policy support, the soybean planting area in China this year has increased to a certain extent compared with last year. If not unexpected, the total output of domestic beans this year will also reach a new high in recent years, reaching 16 million tons. In addition, soybeans may be planted along the "Belt and Road", and Sino US trade frictions are emerging. Countries along the "Belt and Road" are digesting the impact. If the situation continues, they will begin to plant what the Chinese market needs in agriculture. " It is understood that Russia, which is currently located along the "Belt and Road", has already had soybeans coming into the Chinese market this year. Some Chinese enterprises even planted soybeans in Russia by means of labor export. Therefore, on the whole, soybean supply in the future will not be greatly affected, but is more likely to be abundant.
3、 The import of US soybeans decreased, but the total import volume continued to increase, and the advantage of import price still weighed on Liandou
Due to the impact of the Sino US trade war, the import volume of US soybeans decreased. As of October 18, the amount of soybeans imported from the United States in 2018-2019 was 1.09 million tons, 12.86 million tons in the same period last year, a year-on-year decrease of 11.77 million tons or 92%, and the shipment volume was only 200000 tons, a year-on-year decrease of 96%. The trade flow shows that China purchases more soybeans from non US countries.
According to customs data, China imported 76.93 million tons of soybeans from October 2016 to July 2017, an increase of 12.5% from 68.37 million tons in the same period of the previous year. According to the shipping schedule monitoring, it is expected that 14.1 million tons of soybeans will arrive at the port from August to September, and the import volume in 2016/17 will reach a record 91 million tons, much higher than the 83.23 million tons of the previous year. It is estimated that China's soybean import volume in 2017/18 will be 95 million tons, up 4.4% year on year. According to the data from the National Grain and Oil Information Center, China's new soybean supply in 2017/18 is expected to be 109.4 million tons, of which the domestic soybean production is expected to be 14.4 million tons, and the soybean import is expected to be 95 million tons. The consumption of soybean oil in this year is estimated to be 94.3 million tons, an increase of 4.6 million tons and 5.1% over the previous year, including 1.3 million tons of domestic soybeans and 93 million tons of imported soybeans; Soybean food and industrial consumption is expected to be 14.45 million tons, an increase of 450000 tons over the previous year, and the annual soybean supply and demand gap is expected to be 150000 tons. Compared with the tightness of the previous year, the situation was improved. From the perspective of price trend comparison, CBOT soybeans and DCE yellow soybeans No. 1 have seen the highest price of US soybeans from 1789 to 812 since September 2011. The price of US soybeans has dropped by more than half, and is now near 880. The highest price of Liandou soybeans is from 5040 to 3397, with a decline of 33%, and has rebounded to 3510 at present. Compared with Liandou soybeans, the price of US soybeans still hovering at the bottom has more price advantages, This is also the cost reduction caused by the increase of foreign soybean area and output due to the strong demand of China in recent years. It is expected that the low-cost imported soybean will still drag down the domestic soybean price under the favorable import demand of China.
4、 Multi factor superposition downstream demand drops sharply
As we all know, the most important and direct downstream product of soybean is Soybean meal And soybean oil, but at present, on the one hand, the demand for soybean meal has been greatly reduced due to the widespread spread of African swine fever and the reduction of protein feed consumption; On the other hand, the soybean oil inventory is at a historical peak, and it is difficult for the trade war to reverse the loose pattern. Plus domestic Palm The demand for oil has entered the slack season. Due to the high import profits of vegetable oil in the early stage, the import volume of vegetable oil has increased significantly compared with that of last year. At present, the overall inventory also remains high, so the three major oils, including soybean oil, continue to weaken. The above factors will directly lead to a sharp drop in downstream demand for soybeans.
First, look at soybean meal. Since August, the pig epidemic has continued to spread. At present, it continues to spread, and the scope is expanding from north to south. The epidemic situation in the north is relatively serious. At present, the epidemic situation has a tendency to gradually shift to the south, and the market will gradually increase the panic atmosphere about the spread of the epidemic situation. At present, there have been 41 cases of African swine plague in the market, respectively in Shanxi (1 case), Tianjin (1 case), Liaoning (18 cases), Henan (2 cases), Jiangsu (2 cases), Zhejiang (1 case), Anhui (8 cases), Heilongjiang (2 cases), Inner Mongolia (4 cases) and Jilin (2 cases). Affected by this, the farmers are actively selling, the number of live pigs on hand is reduced, and the enthusiasm to supplement the stock is not high. According to the latest data from the Ministry of Agriculture and Rural Affairs, in September, the number of live pigs increased by 0.8% month on month and decreased by 1.8% year on year. Among them, the number of fertile sows decreased by 0.3% month on month and 4.8% year on year. In addition, aquaculture has entered the off-season, and the demand for soybean meal feed is poor. On October 30, the feed industry association recently released new feed protein standards, and the introduction of two standards, including the group standard for low protein formula feed for pigs and chickens, will effectively reduce the consumption of protein feed raw materials such as soybean meal. "It is estimated that after the full implementation of the new standard in the whole industry, the annual consumption of soybean meal in the breeding industry is expected to reduce by about 11 million tons, driving the reduction of soybean demand by about 14 million tons, which will affect the demand for soybean meal. The new low protein standard has been implemented by large feed plants since November 1. At present, the price difference between soybean meal and miscellaneous meal has expanded, and soybean meal has been replaced in feed production. Some large feed factories have begun to adjust the formula. The addition ratio of miscellaneous meal such as rapeseed meal and cotton meal has increased. The addition ratio of rapeseed meal in pig feed has increased from 3% to 5%, or even 8%, and the addition ratio of rapeseed meal in aquatic feed has also increased from 25% to 35%. The proportion of substitutes increased, and the consumption space of soybean meal was compressed. The latest news is that CCFCO plans to release reserved soybeans to some oil plants at the beginning of 2019 to cope with the supply shortage of new crops in South America before they go on the market. It is estimated that 5 million to 6 million tons of soybeans will flow into the oil plant from January to February 2019, and the following April to May, the new South American crops will be concentrated on the market. If the national reserve soybean flows into the crushing market, the pressure of domestic soybean supply shortage will be less than expected. In addition, China will cancel the ban on the import of Indian rapeseed meal. Many enterprises are importing sunflower meal from Ukraine and soybean meal and rapeseed meal from India to make up for the gap in the domestic soybean market in the fourth quarter.
Figure 1 Pig stock
Then look at soybean oil. At present, the soybean oil inventory is at a historical peak, and it is difficult for the trade war to reverse the loose pattern. The soybean oil inventory of the oil factory continued to rise this month. As of November 2, the total commercial stock of domestic soybean oil was 1.848 million tons, an increase of 133000 tons, or 7.76%, compared with 1.715 million tons in the same period of last month, and 258000 tons, or 16.23%, compared with 1.59 million tons in the same period of last year. The five-year average value was 1.3808 million tons, and the inventory was at a historical peak. This month, the total turnover of soybean oil from major factories nationwide was 497240 tons, compared with 438520 tons in September. The leaders of China and the United States plan to meet at the G20 Summit in Buenos Aires, Argentina, from November 30 to December 1. On November 1, President Trump said on Twitter that the Sino US trade war was expected to ease, raising the market's expectation that the trade war would ease or even end later. Since the beginning of Sino US trade friction, it has been repeated. At present, the uncertainty is still large. But on the whole, even if the Sino US trade war continues, it is expected that the extent of boosting soybean oil will be relatively limited, and it is difficult to reverse the weak supply and demand pattern of oil.
Figure 2 Commercial stock of soybean oil
5、 Future market research and trading strategy
To sum up, the trade war has not improved significantly. US soybeans have continued to fluctuate at a low level. The planting of new soybeans in South America has accelerated. Domestic subsidy policy support is expected to continue to increase the planting area and yield. In addition, soybeans have also been planted along the Belt and Road, so future supply is not a problem; Although the import of US soybeans has decreased, the total import of soybeans in China is still increasing, and due to the spread of African swine fever, the implementation of low protein standards and other factors, the downstream demand has dropped significantly, so it is expected that the future price of soybeans in consecutive sessions will fall further.
Based on the above judgment, we chose the trading strategy of shorting soybean futures:
Transaction contract: 1901
Trading direction: sell
Entry point: 3465 -- 3475
Target price: 3200-3460
Stop loss price: 3490-3590
Mobilization quantity: 700
Fund occupation: 45%
Hehe Futures Team 1
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Editor in charge: Song Peng
