Possible Chinese imports decline bearish for soybean prices
China plans to lower soybeans imports by reducing soybeans use for feed. Will the soybeans price continue declining?
China plans to lower soybeans imports by reducing soybeans use as an animal feed. China’s Feed Industry Association last Friday approved new standards for the feed for pigs and chickens, lowering the protein levels in pig feed by 1.5 percentage points and those for chickens by one percentage point. If successful such measures may cut the country’s annual soymeal consumption by 11 million tons and soybeans by 14 million tons, according to the agricultural ministry. Brazil, which has benefitted from increased demand after China’s reciprocal tariffs raised the cost of US soybeans for Chinese importers, is set to harvest a record crop. And US Department of Agriculture estimates world ending stocks for 2018/19 will be higher. Lower Chinese import demand while supply increases is bearish for soybeans prices.
On the daily timeframe the SOYB: D1 is falling after retracing to two-month high in mid-October.
Technical Analysis Summary
Position Sell
Sell stop Below 844.10
Stop loss Above 895.70
China plans to lower soybeans imports by reducing soybeans use for feed. Will the soybeans price continue declining?
China plans to lower soybeans imports by reducing soybeans use as an animal feed. China’s Feed Industry Association last Friday approved new standards for the feed for pigs and chickens, lowering the protein levels in pig feed by 1.5 percentage points and those for chickens by one percentage point. If successful such measures may cut the country’s annual soymeal consumption by 11 million tons and soybeans by 14 million tons, according to the agricultural ministry. Brazil, which has benefitted from increased demand after China’s reciprocal tariffs raised the cost of US soybeans for Chinese importers, is set to harvest a record crop. And US Department of Agriculture estimates world ending stocks for 2018/19 will be higher. Lower Chinese import demand while supply increases is bearish for soybeans prices.
On the daily timeframe the SOYB: D1 is falling after retracing to two-month high in mid-October.
- The Parabolic indicator gives a sell signal.
- The Donchian channel indicates downtrend: it is tilted lower.
- The MACD indicator gives a bearish signal: it is below the signal line and the gap is widening.
- The Stochastic oscillator has breached into the oversold zone, this is bullish.
Technical Analysis Summary
Position Sell
Sell stop Below 844.10
Stop loss Above 895.70