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Soybean Futures Fall on Record US Crop, African Swine Flu Outbreak

August 28, 2018 at 14:58 by Andrew Moran

Soybean futures are tumbling on Tuesday on reports of a record US crop and fears of an African swine flu outbreak. Soybean prices have been parked under the $9 threshold for much of August, adding to their abysmal 2018 performance.

November soybean futures slipped $0.06, or 0.71%, to $8.422 per bushel at 14:33 GMT on Tuesday on the Chicago Board of Trade (CBoT). Year-to-date, soybean is down more than 13%.

According to the US Department of Agriculture (USDA), US soybean production yield is forecast to be 51.6 bushels per acre, up 5% from 49.1 bushels in 2017. This is expected to be the second highest on record after topping 52 bushels per acre in 2016. In total, soybean output is anticipated to surpass last year’s record of 4.392 billion bushels.

The projections come as the USDA announced on Monday that it will send payments totaling $4.7 billion to farmers who have seen their output impacted by “unfair retaliatory tariffs.” Beginning on September 4, USDA’s Farm Service Agency will maintain a program to extend payments to soybean, corn, dairy, hog, and wheat farmers – soybean farmers will receive most of the compensation: $3.7 billion.

The compensation will be an initial payment of $12 billion in aid President Donald Trump and his administration promised in July.

Sonny Perdue, the US Secretary of Agriculture, said in a statement:

Early on, the President instructed me, as Secretary of Agriculture, to make sure our farmers did not bear the brunt of unfair retaliatory tariffs. After careful analysis by our team at USDA, we have formulated our strategy to mitigate the trade damages sustained by our farmers. Our farmers work hard, and are the most productive in the world, and we aim to protect them.

Overseas there are now fears that there are outbreaks of African swine flu across China, something that may slash demand for feed. At the same time, there are enormous soybean inventories in the world’s second-largest economy.

In other agricultural commodities, December corn futures rose $0.02, or 0.55%, to $3.63 per pound. December wheat futures slumped $0.067, or 1.25%, to $5.35 a bushel. November orange juice futures fell $0.015, or 0.96%, to $1.552 per pound.

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