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Soybeans Slide to One-Month Low on Year-End Profit-Taking

December 8, 2020 at 17:56 by Andrew Moran

Soybean futures are sliding to their lowest levels in about a month as hedge funds and money managers continue to take year-end profits. Soybean prices enjoyed a bump to kick off the trading week on bullish industry data, but traders took the opportunity to pad their bottom line. Can soybean retest $12 heading into 2021?

January soybean futures tumbled $0.105, or 0.91%, to $11.48 per bushel at 16:41 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybean prices have had a stellar year, rallying more than 20% year-to-date. This is the lowest level the crop has traded since the beginning of November.

All eyes will be on the Thursday US Department of Agriculture (USDA) supply-and-demand report for South American crops. Brazil witnessed some relief to parched crops as the northern and central region received weekend rains. But the world’s largest producer continues to face a moisture deficit. Argentina, another key soybean producer, has several dry production areas.

In the meantime, investors combed through the latest sector figures to determine what positions to take to finish the year and to start 2021.

On Monday, the USDA reported that 2.297 million tons of US soybeans were inspected for export last week, beating the market forecast of about two million. This is an important metric because it can offer insight into the state of foreign demand.

According to the General Administration of Customs, China’s soybean imports surged more than 15% year-over-year in November to 9.59 million. Market observers believe Beijing will continue to import more soybeans to satisfy pork demand, which is a crucial meat product during the upcoming Lunar New Year holiday. But industry experts think that the world’s top consumer of soybean will begin to reduce its purchases in the first quarter of next year.

The latest data from the Commodity Futures Trading Commission (CFTC) weekly commitments of traders report suggested that non-commercial traders cut their net long positions in soybeans.

In other agricultural commodities, January corn futures fell $0.05, or 1.18%, to $4.19 per pound. January wheat futures dropped $0.0675, or 1.17%, to $5.7075 a bushel. March coffee futures edged up by $0.001, or 0.08%, to $1.1935 per pound.

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