1 July 2020
- This week we are registering tighter supply conditions along the global bean supply chain. Recent market strength has a lot to do with this observation. Weather conditions are gradually emerging as the main swing factor for prices. Our proprietary climate model turned decisively bullish on Monday, suggesting that stress is piling up for early July.
- Our spot demand assessment for up and mid-stream demand remains bearish, but the outlook for the second half of July has improved. Our Forward Demand Model shows the recent negative trend followed by the turn earlier this week.
- The macroeconomic environment has deteriorated since our last publication. Evidence suggests that credit is expanding in key consumption regions, but the momentum of uptake of credit lines from economic entities has slowed. More worryingly still, the proprietary FX Impact Model, displayed in The Chart of the Week, continues to diverge with the soybean market price. Such divergence is unsustainable, and it is likely to limit any hard-won market gains.