Soybeans hit 2-year low amid ample supply and weak demand

CANBERRA: Chicago soybean futures slumped to a two-year low of below $12 a bushel on Tuesday, weighed down by improving supply expectations from South America and concerns about demand from China.

Corn futures also dipped and were near three-year lows amid plentiful supply, while wheat fell under pressure from cheap grain flowing out of the Black Sea region.

The most active soybean contract on the Chicago Board of Trade (CBOT) was down 0.4% at $11.89-3/4 a bushel by 0446 GMT. It hit $11.89-1/4 earlier, the lowest since November 2021.

“Soybeans are under pressure from the prospect of higher supply coming out of Argentina,” said Andrew Whitelaw at consultants Episode 3.

“Demand is also an issue with economic woes persisting in China, the world’s number one importer,” he said.

“We expect a bearish environment for a while.” Soybeans prices have sagged since rainfall in South America boosted yields.

Last week, the Buenos Aires Grains Exchange raised its soybean and corn crop estimates for Argentina, while in Brazil, the 2023/24 soybean harvest had reached 11% of the planted area as of last Thursday, consultants AgRural said.

Demand from China, meanwhile, is expected to weaken as the country’s pig herd shrinks and its real estate crisis deepens.

Speculators have built their most bearish-ever January view across US grains and oilseeds and funds were net sellers of soybeans, corn and wheat futures on Monday, traders said.

Soybeans near multi-year lows as supply outlook improves

In other crops, CBOT corn was down 0.5% at $4.38 a bushel, a whisker away from the three-year low of $4.37 it hit earlier this month.

Wheat fell 0.4% to $5.91-1/4 a bushel, not too far from its three-year low of $5.40 from last September.

In wheat, Russian export prices continued to decline last week amid oversupply pressure in the Black Sea, with 12.5% protein FOB wheat falling to $235 a metric ton, consultants IKAR said.

The European Commission raised its forecast for EU stocks of soft wheat at the end of the 2023/24 season by around 700,000 tons, to 19.1 million tons, after upward revisions to harvest production and imports.

A cold snap sweeping central and northern India could help farmers harvest a bumper wheat crop this year, officials and growers said.

The government projects a record harvest of 114 million tons. The US Department of Agriculture reported export inspections of US wheat in the latest week at 264,666 tons, below trade expectations.