Commodity Blog

Soybean futures are extending their losing streak on Tuesday as improving crop ratings and better-than-expected harvest yields weigh on the agricultural commodity. Since the crop rallied to its best level since May 2018, soybean prices have been on a downward path, falling below the crucial psychological level of $10.

November soybean futures tumbled $0.0925, or 0.93%, to $9.87 per bushel at 14:24 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybean has slipped more than 3% over the last week, but it is poised for a monthly surge of 3.5%. Year-to-date, soybean prices are up about 3.2%.

According to the US Department of Agriculture (USDA), the domestic soybean harvest was 20% completed, up from just 6% in the previous week. This is also above the five-year average of 15%. The US corn crop was also 15% harvested, nearly double from last week. But it is below the five-year average of 16%.

Moreover, 64% of soybeans were rated in good-to-excellent condition, up 1% from last week. Sixty-one percent of corn was rated in good-to-excellent condition, unchanged from last week.

In a separate weekly report, the USDA confirmed that weekly export sales reached 3.195 million tons, higher than the market forecast of between two million tons and three million tons. The US government did not announce any new private export deals, the first time since the beginning of September.

Meanwhile, according to the General Administration of Customs, China’s August imports of soybeans from Brazil increased 22% from the same time a year ago. Chinese importers took advantage of higher margins and a weaker Brazilian real. In total, Beijing scooped up 9.6 million tons of soybeans in August.

Early estimates suggest that China’s soybean arrivals from the US and Brazil will remain high for the remainder of 2020.

A weaker greenback eased the pressure on soybean’s slump. The US Dollar Index, which gauges the greenback against a basket of currencies, tumbled 0.36% to 93.94, from an opening of 94.24, on Tuesday. Despite the currency’s 2% rally in September, it has slipped in recent sessions. A lower buck is good for dollar-denominated commodities because it makes it cheaper for foreign investors to buy.

In other agricultural markets, November corn futures fell $0.045, or 1.23%, to $3.6225 per pound. November wheat futures edged up by $0.005, or 0.09%, to $5.5075 a pound. December coffee futures shed $0.0035, or 0.32%, to $1.092 a pound.

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