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Soybean Rises on Higher Chinese Imports, Historic US Flooding

March 25, 2019 at 13:35 by Andrew Moran

Soybean futures are rallying to kick off the trading week as the agricultural commodity got a boost from higher Chinese imports of US soybeans and a historic flood that impacted a major soybean market. Investors are also paying attention to a new report that found Brazil and Canada saw its soybean exports surge, thanks to higher demand from the world’s second-largest economy.

May soybean futures tacked on $0.0225, or 0.25%, to $9.06 per bushel at 12:50 GMT on Monday on the Chicago Board of Trade (CBoT). Soybean was flat last week, continuing its rough beginning to 2019 as prices are down 0.1% year-to-date.

According to the General Administration of Customs, China imported 907,754 tonnes of US soybeans in February, up from 135,814 tonnes in January. The increase was part of the 90-day trade truce that Beijing and Washington agreed to in December. While this is a dramatic uptick, it still represents a fraction of the more than three million tonnes that China imported from the US in February 2018.

China has promised to purchase an additional 10 million tonnes, but many experts think Beijing will fall short, especially if the swine fever outbreak persists.

But it looks like the US is losing market share to other countries amid the ongoing trade dispute. Last month, China imported 1.986 million tonnes of soybeans from Brazil, up 13% from the same time a year ago. Also, Canada witnessed its soybean exports more than triple during the early part of the 2018–2019 marketing year, shows new US government data.

The US Department of Agriculture (USDA) wrote in its report:

Total soybean production decreased by 13% in MY 2018/2019, despite record production in Ontario, as area planted declined in Manitoba and Saskatchewan. Soybean exports to China increased by 230% through the first half of MY 2018/2019, supported by the Ontario crop, high carryover stocks, and Eastern Canadian access to US soybean imports.

Meanwhile, a massive flood struck Nebraska last week, leading to corn and soybean farmers contemplating if they should begin to plan next month amid wet fields. There are some decisions they could make, including not to plant, plant later in the year, or contend with potential yield losses. There is another possibility that Nebraskan growers could switch to a different crop. In any event, the trends could reduce the supply glut with domestic output possibly shrinking.

In other agricultural commodities, May corn futures edged up $0.0025, or 0.07%, to $3.785 per pound. May wheat futures climbed 0.0075, or 0.16%, to $4.6675 a bushel. May orange juice futures tumbled $0.0045, or 0.35%, to $1.294 per pound.

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