Soybean futures rose on continued strong export activity, marking a positive trend for commodity traders. Reports indicate significant international purchases of U.S. soybeans, which have driven prices up in recent sessions. The agricultural sector continues to monitor weather conditions and crop yields, both critical factors shaping the supply and pricing of soybeans.
Favorable weather has supported a robust harvest, but the increasing demand from foreign markets is the primary factor driving the recent price surge. Traders are also eyeing the impact of geopolitical factors on trade flows. Trade deals and tariffs remain pivotal in shaping the soybean market, as they directly influence export dynamics.
The soybean oil and meal markets have mirrored the rise in soybeans, showing comparable upward trends. These markets play a significant role in the feed and biodiesel industries, respectively. Overall, the outlook remains cautiously optimistic as traders await further data on international demand and crop reports.
The continued strong performance highlights the importance of the export market for U.S. soybean producers. The soybean market has certainly had its share of bearish news lately. One million additional soybean acres, along with the estimate for a record yield of 53.2 bushels per acre (bpa), 154 million bushels (mb) more soybeans in August than in July, and a comfortable, if not burdensome, carryout of 560 mb of soybeans in 2024-25.
Soybean export trends impact prices
That is the bearish supply side of the equation, but there is still some key growing weather ahead. The next two weeks seem to show a much warmer and drier finish for the crops than farmers would desire.
The Delta has had a dearth of good moisture over the last several weeks, and extreme temperatures in the Western Corn Belt may have clipped potential. On the export side, the U.S. is the best and cheapest choice for world importers, and subtly, China is starting to cash in on the cheap prices. On Monday, China bought another 11.8 mb of U.S. beans, with unknown destinations listed as the buyer of another 4 mb.
China is still thought to have substantial quantities to buy into January, and the U.S. is the only game in town. Brazil’s meteoric rise in the soybean basis has priced them out of contention. Domestic crush continues at a record pace, with July’s NOPA showing 182.9 mb crushed — a record large amount for that month.
Funds reduced some of their record net-short in soybeans, but remain close to 170,000 contracts short beans along with 80,000 contracts short in bean oil. It is difficult to imagine how much more bearish news can yet be thrown at the soy market; but for now, the bearish funds remain in control. Typically, in big crop years, the bearishness is baked in early and seasonal lows are often forged in August.
We shall see if history repeats itself and we get a much-needed rally in soybeans.
- BarChart.”Soybeans Push Higher Following Continued Export Business”.
- AndersonsGrain.”Morning Comments – August 20, 2024 – The Andersons Trade Group”.
- DTNPF.”Is Most of the Bearish News Already in For Soybeans?”.