26 August 2020
- Weather conditions in the USA remain a key swing factor for the nearby prices, but we can also include the persistent tightness in the spot supply for beans on the global seaborne market. This tightness, which is not related to any new US crop considerations, is formed by the shifts along the global supply chain for beans. It re-appeared during weeks #23-24 and it refused to dissipate.
- Our spot demand view (2-3 weeks out) is negative for price. The negative pressure is identified during weeks #37-39, which is displayed in The Chart of the Week. Furthermore, demand for soybean downstream remains weak and currently this should be a major concern for the bull’s camp.
- The macroeconomic environment has somehow improved, thanks to better Asian and European macro data in July and August. The critical mass of market participants appears to agree with this statement, as the speculative net long positions kept increasing throughout June, July, and August. Regardless, macro lost some of its grip on the soybean price formation replaced by stronger demand influence.