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Soybean Falls As USDA Slashes Export Estimates

September 4, 2019 at 15:47 by Andrew Moran

Soybean futures are trading lower midweek after the US government slashed its export projections as the trade dispute and weakening global economy continue to batter the industry. The demand woes are taking a toll on prices, and it is expected to worsen until a new US-China trade agreement is established.

November soybean futures dipped $0.015, or 0.17%, to $8.67 per bushel at 15:19 GMT on Wednesday on the Chicago Board of Trade (CBoT). Soybean has been trading flat for the last three months, but it is down about 3% year-to-date.

According to the US Department of Agriculture (USDA), 55% of the soybean crop was rated good-to-excellent, which is slightly under market forecasts. Its weekly Crop Watch Report also found that 6% of the domestic soybean crop was mature, falling behind the five-year average of 13%.

USDA officials slashed its agricultural exports by 6.2% to $134.5 billion. If the projections are accurate, then it would be the lowest amount of exports in three years. Of course, the biggest contributor to this industry decline is soybean amid the trade spat that is sending the global economy into a tailspin. But it is not only the American soybean industry taking a hit.

Brazil’s soybean exports tumbled 32% in August, down 34.4% year-on-year. In the first eight months of 2019, Brazil exports are down 9.5%. Its major market is China, shipping 80% of its soybean output to Beijing. But it is also relying on other markets, too, such as Iran, the Netherlands, Spain, and Turkey.

Meanwhile, Canada’s agricultural sector is slumping. Statistics Canada reports that field crop production is decreasing, particularly in Ontario because of the soggy and cool spring. The statistics agency says soybean yields will slide 15%, and farmers are warning that this difficult season could be felt for years.

In other agricultural commodities, October corn futures shed $0.035, or 0.97%, to $3.575 per pound. October wheat futures surged $0.0625, or 1.38%, to $4.5975 a bushel. October orange juice futures rose $0.0225, or 2.25%, to $1.0245 a pound.

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