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Soybeans Flat on Weak Demand, Ample Global Supplies

December 3, 2019 at 16:13 by Andrew Moran

Soybean futures are trading relatively flat on Tuesday as weak North American demand and ample global supplies have placed a cap on their recent rally. Soybean prices had rebounded and snapped an eight-session skid, a losing streak that added to three-month declines. With US and China still unable to reach a trade agreement, it might be trying times for the agricultural commodity heading into 2020.

January soybean futures rose $0.0075, or 0.09%, to $8.7125 per bushel at 14:55 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybean has fallen 7% over the last month, adding to its year-to-date drop of 2.5%.

Commodities investors are anxiously waiting for signs that are pointing to a phase one deal between the world’s two largest economies. In the return from the Thanksgiving holiday weekend, it was reported that Chinese officials want tariff rollbacks as part of phase one. The White House doubled down on threats to impose tariffs on the remaining $156 billion in Chinese goods on December 15.

President Donald Trump also surprised global markets when he restored tariffs on Argentine and Brazilian aluminum and steel exports because of currency devaluation. It should be noted that China has increased its imports of soybeans from Argentina and Brazil.

According to the US Department of Agriculture (USDA), soybean export inspections fell 20% last week, from 1.952 million tons to 1.545 million tons, falling short of trade estimates.

A new Reuters survey of 16 market analysts found that Brazil’s 2019–2020 soybean harvest could hit a record high of 122.7 million tons. A separate Agroconsult report noted that port premiums of about 8% are protecting the nation’s soybean prices.

Are financial markets bullish on soybeans yet? It turns out that money managers and hedge funds posted a record selloff of soybeans last month, suggesting that the big money is leaving agriculture.

In other commodity markets, January corn futures added $0.0175, or 0.46%, to $3.8375 per pound. January wheat futures shed $0.035, or 0.65%, to $5.3175 a bushel. January coffee futures surged $0.0225, or 1.84%, to $1.2425 per pound.

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