Soybean futures are retreating from their best levels in a week after the US government reported that domestic crop plantings fell below expectations. With China renewing its demand for the agricultural commodity, could soybean prices rally in the coming weeks? It depends on Brazil and how it responds to the coronavirus pandemic after becoming a hotspot.
July soybean futures tumbled $0.045, or 0.53%, to $8.405 per bushel at 16:57 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybean prices recently touched
According to the US Department of Agriculture (USDA), American farmers planted 53% of their intended soybean acreage, falling short of the median estimate of 56%. Corn witnessed similar results, planting 80% of farmers’ intended acreage, which was below the 81% forecast. The USDA added that 60% of the spring wheat crop was planted, matching market expectations.
The USDA also rated 52% of the winter wheat crop in good to excellent condition.
China has been accelerating its soybean purchases as the government requested importers and food processors to increase inventories in the event of a second wave of COVID-19 cases. Its pig herd is also recovering from the deadly African swine flu, lifting demand for the feedstock. So far, Beijing has purchased approximately one million tons of soybeans from the US for the 2019–2020 and 2020–2021 marketing season.
The Chinese government recently enforced lockdown measures on 100 million people after experiencing a resurgence of the virus outbreak. Authorities might be anticipating another serious situation.
But while China has been buying from the US, it has also risen its purchases from Brazil. The world’s top producer reported that it exported a record amount of soybeans last month. In April, Brazil shipped 16.3 million tons, which is higher than the previous
Meanwhile, the Commodity Futures Trading Commission (CFTC) data found that investment funds increased their net
In other agricultural markets, July corn futures rose $0.0225, or 0.7%, to $3.23 per pound. July wheat futures jumped $0.0075, or 0.15%, to $4.9775 a bushel. July coffee futures picked up $0.003, or 0.28%, to $1.0735 per pound.
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