Methodology notice: Agricensus proposes to change methodology for APM-6 soybean China CFR

In response to market feedback, Agricensus proposes to change the assessed period for the spot China CFR soybean contract (APM-6) to capture more liquidity.

The current methodology states that the assessed laycan is for loading at port in the following calendar month of the assessment date.

Agricensus proposes to change this to roll the assessment mid-month on the 16th of the month or the first working day thereafter.

So for example, from January 16th through February 15th, the APM-6 China CFR assessment will reflect the value of cargoes loading March. And from February 16th through March 15th, the APM-6 China CFR assessment will reflect the value of cargoes loading in April.

The assessment period will not cross over shipment months.

This change will be effective from 15 February 2019.

In addition to proposing the change of laycan, Agricensus would like to clarify its methodology on specification.

The current methodology states that the specification must conform to basis 34.5% protein, and 18.5% oil content irrespective of origin.

Given the basis and minimum specification is similar for both US and Brazil origins, and acknowledging that Brazil-origin beans command a premium for the likelihood of higher protein and oil content, Agricensus would like to clarify that the assessment period of September through January load out will typically reflect soybeans loading in the US Gulf and from February through August it would typically reflect soybeans loading in southern Brazil ports.

No theoretical normalisation process can take place between the two locations as the basis price and minimum content for both oil and protein are identical.

In addition, Agricensus would like to clarify that, going forward, price indications will be disregarded or adjusted if they are from origins with additional tariff or non-tariff barriers that make them uncompetitive on price once customs cleared.

PNW load out indications will be taken into account and normalised due to the shorter journey time. So for example, to ascertain September value for US Gulf ports, PNW indications for October may be used.

Please send all comments or questions to info@agricensus.com.