October 31, 2023

Chicago soybean futures rally on strong US demand

Chicago Board of Trade (CBOT) soybean futures saw a significant rally, with soymeal hitting a contract high due to robust demand for supplies from the United States, according to analysts, Reuters reported.

The increase in demand for US soymeal is driving exports to new highs this season, especially after a poor soybean harvest in Argentina, the leading soymeal exporter. This situation is creating competition for limited U.S. supplies among domestic soymeal users, such as swine and poultry feeders.

Arlan Suderman, chief commodities economist at StoneX, said that there is a resurgence in demand in soymeal once again, adding that a break in price has uncovered some fresh demand.

The CBOT January soybeans settled up 19-1/4 cents at US$13.19-1/2 a bushel, reaching a one-week high. December soymeal finished US$12.9 higher at US$442.40 per tonne after touching a contract high of US$448.4 per tonne.

While unconfirmed chatter circulated about China cancelling purchases of Brazilian soybeans, traders noted that US soybeans are still more expensive than Brazilian supplies. Suderman said that there are rumours that China washed out some cargoes of Brazilian soybean, meaning they'll probably be looking more for US soybeans.

Meanwhile, corn settled up 1 1/2-cents at US$4.80-3/4 a bushel, while wheat declined by 4 cents to close at US$5.75-1/2 a bushel at the CBOT.

Wheat faced pressure as shipping via Ukraine's new Black Sea export corridor resumed after a three-day pause. Ukrainian Deputy Prime Minister Oleksandr Kubrakov refuted reports suggesting a suspension of the Black Sea export channel, which raised uncertainties about Kyiv's efforts to revive export trade after Moscow withdrew from an accord allowing Ukrainian grain shipments through the Black Sea.

According to agriculture ministry data, Ukraine's grain exports for the 2023/24 season have declined to 8.72 million metric tonnes from 12.34 million the previous year.

-      Reuters