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Soybeans Trying to Rebound From 2018 Lows on USDA Crop Ratings

July 18, 2018 at 15:11 by Andrew Moran

Soybean futures are trading lower for the first time this week as the agricultural commodity tries to continue its rebound from its 2018 lows. Soybean prices have rallied in recent days on reports of poor crop conditions amid unfavorable weather patterns.

November soybean futures tumbled $0.0225, or 0.26%, to $8.53 per bushel at 14:16 GMT on Wednesday on the Chicago Board of Trade (CBoT). So far this week, soybeans have jumped roughly 1%, but they are still down 18% over the last three months.

On Monday, the US Department of Agriculture (USDA) said that 69% of the domestic soybean crop were in good to excellent condition, down from 71% last week. Experts are blaming the hot and dry weather for the yield declines, leading many to worry if the unfavorable weather conditions will hurt the region in August, an important time for soybean farming.

Corn farmers are enduring the same thing. The USDA reported that 72% of the crop were in good to excellent condition, down from 75% early last week.

December corn futures climbed $0.50, or 0.14%, to $3.6025 a pound.

In the background is the continued trade spat between the US and China. One of the last US soybean shipments made its way to the world’s biggest consumer of soybeans earlier this month. The soybean industry became concerned when a Chinese government official said the country does not need US soybeans for state reserves.

The comments have confirmed that Beijing is considering two different directions to take: import more from South America and produce more soybeans at home. Last week, China’s Ministry of Agriculture slashed its projections for soybean imports for the 2018–2019 crop season, warning that higher prices resulting from trade disputes will reduce demand, prompting farmers to use alternative ingredients for their animal feed inventories.

With the US government slapping tariffs on hundreds of billions of dollars on Chinese goods, the world’s second-largest economy has responded with retaliatory tariffs that primarily target US agriculture, including the soybean sector.

In other agriculture commodities, September wheat futures shed $0.0125, or 0.25%, to $4.962 per bushel. September orange juice futures slid $0.06, or 0.35%, to $1.707 per pound. September coffee futures plunged $0.0165, or 1.51%, to $1.076 a pound.

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