Chinese demand for soybeans in 2016 concerns Ted Seifried, Zaner Ag Hedge.
“They’ve been very hot and heavy here the last two years,” Seifried tells Tyne Morgan on the “AgDay” Agribusiness Update segment. What happened was in 2012, when we saw record high prices, we saw a drought in South America followed by a drought here, soybean production really dropped dramatically. They had to really go in and use any sort of reserve stocks that they had. So they’ve spent the last two years building those reserve stocks.
“The idea is now at this point, they might be done with that,” Seifried continues. You look at the export sales for next year for new-crop beans, they’re really poor compared to what we’ve seen the last two years. The concern is that Chinese demand might be falling off this year. They’re still going to want soybeans, but maybe not as drastic.”
Large global production of oilseeds will continue to weigh on prices for crops including soybeans and canola. It’s possible 2015/16 stocks for the latter will be at lows last seen 14 to 18 years ago, Seifried says.
“Bad as it’s been in the Dakotas and Minnesota as far as colds temps, snow, freezing, it’s been worse in Canada,” he points out. “As far as planting that canola crop, they’re well behind. What has been planted has gotten damaged, or a lot of areas have gotten damaged, so you might have to see some replanting there.”
Canola prices are climbing due to planting struggles in Canada. So what does that mean for prices in oilseeds in general?