August 10, 2023

 

US soybean futures drop amid favourable weather, wheat surges on global supply concerns

 

Chicago Board of Trade (CBOT) soybean futures experienced a decline of 2.5% on Monday driven by widespread rainy conditions across crucial US crop regions, while wheat prices were up due to global supply concerns, Successful Farming reported.

 

This weather, coupled with favourable August forecasts for growth, drove soybean prices to their lowest point in over five weeks.

 

Conversely, wheat futures saw an increase of nearly 3% as global supply worries escalated. These concerns were spurred by apprehensions of heightened hostilities affecting Black Sea shipping routes, ignited by a Ukrainian strike on a Russian tanker.

 

The positive weather conditions that boded well for crops had a dampening effect on the corn market. This market was headed for its ninth consecutive session of losses out of the last ten. Nonetheless, the declines were mitigated by the upward trajectory of wheat prices.

 

Mark Schultz, chief analyst at Northstar Commodity based in Minnesota, said that the weekend rains were probably every bit as good as they were forecasting.

 

CBOT November soybean futures recorded a decline of 37-1/4 cents, settling at US$12.96 per bushel. This marked a significant low, reaching levels last seen on June 30 at US$12.91.

 

CBOT September soft red winter wheat futures displayed a contrasting pattern by rising 18 cents to US$6.51 per bushel. Meanwhile, CBOT December corn experienced a marginal dip of 3/4 cent, reaching US$4.96-1/2 per bushel.

 

Matt Ammermann, commodity risk manager at StoneX, highlighted the heightened concerns around wheat. He said that wheat is being supported by increased risks from the Black Sea war with the Ukrainian attack on a Russian merchant ship over the weekend following the attack on Novorossiysk on Friday. Concern is that the conflict could be moving to a new level.

 

The recent wave of export deals in corn and soybeans added a stabilising factor for both commodities. The decline in prices prompted a renewed interest in US supplies from international buyers.

 

The US Agriculture Department announced that private exporters had reported the sale of 132,000 metric tonnes of soybeans to China and 251,460 metric tonnes of corn to Mexico for delivery in the 2023/24 marketing year.

 

-      Successful Farming