3 September 2020
- Weather conditions in the USA remain a key swing factor for the nearby prices, but now we can also include the persistent tightness in the spot supply for beans on the global seaborne market. Such tightness is not related to any new US crop considerations and it 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) has changed abruptly, at the end of last week it turned from negative to positive. This is the sharpest swing in demand experienced by the model so far this year. The positive pressure is identified during weeks #36 onwards and is displayed in the Chart of the Week.
- 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 continues to lose some of its grip on the soybean price formation, replaced by stronger demand influence. This demand is partially driven by stronger credit creation.