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Soybeans Jump on Lower Stockpiles, Higher Exports

February 25, 2020 at 16:49 by Andrew Moran

Soybean futures are trading higher on Tuesday, despite fears that the coronavirus will dampen Chinese imports. Although prices are still close to their lowest levels in three weeks, soybeans are edging up based on reduced stockpiles and a rebound in exports. The biggest question mark in the short-term is how the agricultural commodity market reacts to the outbreak that is impacting 25 countries.

May soybean futures rose $0.0275, or 0.31%, to $8.88525 per bushel at 15:33 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybean has had a rough start to 2020, falling nearly 8% year-to-date.

According to the US Department of Agriculture (USDA), domestic soybean inventories are forecast to decline 25% within the next season as exports to China rebound amid phase one of the bilateral trade deal. But while Beijing is increasing its soybean imports, many other markets are also buying more of the crop, especially with prices at multi-year lows.

Increasing global import demand, particularly for China, and a recovery in US market share will support higher soybean exports following a sharp decline over the past two years.

That said, the USDA noted that domestic soybean inspections fell 41% in the week ending February 20. This is an important metric for commodity traders and farmers because the number of inspections correlates with the level of shipments. So, the fewer the inspections, the fewer the exports.

In industry news, Argentine President Alberto Fernandez is planning to hike the soybean export tax to 33%, according to local media reports. Soon after coming into office last year, Fernandez introduced a tariff on soybean, oil, and meal to generate revenues for the country’s ambitious progressive policies.

In other agricultural markets, April corn futures were unchanged at $3.7625 per pound. April wheat futures tumbled $0.03, or 0.56%, to $5.3175 a bushel. March orange juice futures picked up 0.25 cents, or 0.26%, to 97.10 cents per pound.

If you have any questions and comments on the commodities today, use the form below to reply.

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