Soybeans dip as market weighs tighter US stocks against broader supply outlook
- The most-traded soybean contract on the Chicago Board of Trade was down 0.3% at $12.24-1/4 a bushel
Chicago soybean futures edged lower despite a USDA report forecasting tighter supplies, while corn also dipped and wheat rose, influenced by global supply dynamics and geopolitical factors.
- Impact of USDA reports on soybean and corn production forecasts.
- Factors influencing soybean prices, including biofuel demand and global supply.
- Geopolitical events affecting crude oil, palm oil, and Black Sea crop supply.
CANBERRA: Chicago soybean futures edged lower on Wednesday as traders weighed whether a US Department of Agriculture report that unexpectedly forecast tighter US supplies was enough to reverse a weeks-long price slide.
Corn futures also dipped slightly after rallying in the previous session when the USDA made bigger-than-anticipated cuts to its US production and inventory forecasts.
Wheat futures rose, but gains were capped by the USDA saying harvests in Australia and Argentina would be bigger than it previously thought, adding near-term supply to the market.
The most-traded soybean contract on the Chicago Board of Trade (CBOT) was down 0.3% at $12.24-1/4 a bushel at 0505 GMT after rising 3.4% in the previous session when the USDA report dropped.
The USDA’s US soybean production forecast was 23 million bushels below the average analyst estimate in a Reuters poll.
The agency also increased its domestic and export demand forecasts and cut its estimate of US end-of-season stocks by 15 million bushels, when analysts had expected an increase of 16 million bushels.
However, several factors continue to weigh on CBOT soybeans, which last Friday fell to $11.84, their lowest since mid-August.
Hopes for Iran war de-escalation have helped push down crude oil and palm oil prices , pressuring soybeans used as a feedstock for biofuel, while soy planting in top producer Brazil is progressing well and Russia-Ukraine peace talks could increase crop supply through the Black Sea.
“It wouldn’t surprise me if the bearish momentum returned, at least in the short term,” said Sean Hickey, an analyst at Bendigo Bank Agribusiness.
In other crops, CBOT corn slipped 0.2% to $4.48-1/4 a bushel and wheat rose 0.2% to $5.94 a bushel.
Both contracts hit multi-month lows in recent days.
“CBOT wheat positioning is very stretched on the short side and vulnerable to short-covering if progress is not made on a normalisation of Russian and Ukrainian export flows,” analysts at JPMorgan said in a note.
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