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Market Trends Report | January 20, 2016

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There was no lack of news for the market to trade off of Tuesday after being closed on Monday 1/18 in observance of the Martin Luther King Holiday. Today saw an announcement by the Chinese central bank that they would inject 600 billion yuan ($91 billion) into the financial market.  They also said it would cut the 3 month interest rate to 2.75%.  Both of these stimulus moves are being done to help the Chinese economy which has slowed to a pace not seen since 1990.

New weather forecasts released today showed that the extended forecast for Brazil is predicting rain which may disrupt the soybean harvest.  Meanwhile short term forecasts call for continued dry weather. Yields on soybeans still look very good for the South American crop.

US and EU sanctions were lifted this weekend which will allow Iran to access world markets again.  Analysts expect Iran to increase their crude oil production by 600K to 1 MM barrels a day which could pressure crude oil prices even further. Currently crude oil is trading below $30/barrel.

It was reported that Malaysia may increase their bio-diesel mandate to 10% despite their production of palm oil being expected to decline marginally in 2016. Indonesia’s palm production is expected to increase slightly to 32.5 million MT.

After the market digested all these big news headlines, soybean oil futures finished higher by about 1/3 of a cent at $.3003.

Analyst firm, Informa, released their planted acres and soybean production estimate for 2016.  They forecast that 85.2 million acres of soybeans will be planted which is 2.5 million acres more than the 82.7 million acres planted last year.  With the increased acres, they expect soybean production in the US to be 3.945 billion bushels; larger than the 3.930 billion bushels produced in 2015.

 

Disclaimer: Oasis Foods shares the information above to provide insight on the factors affecting the pricing of our products. It is intended to be used for informational purposes only and should not be interpreted as purchasing advice.