Soybeans Eke Out a Slump Early in Wednesday Morning
Soybean futures continued their downward trend on Tuesday, with futures eased off the lows but closing with 6 to 8 cent losses. The cash bean price is down 7 3/4 cents at $9.67, and soy oil futures are back down 98 to 159 points on the day.
The latest Crop Progress data from NASS showed conditions steady at 68% good/excellent, but the Brugler500 index was down another point to 373. The Jan 26 Soybeans closed at $10.53 1/4, down 6 3/4 cents, and are currently down 1 cent. Similarly, Nov 25 Soybeans closed at $10.33 3/4, down 7 1/2 cents and are currently down 1 cent.
The recent price changes in soybeans, soymeal, and soy oil futures are driven by a mix of supply and demand factors as well as market structural shifts.
U.S. Production Stability vs. Acreage Decline
While U.S. soybean yields are at a record high (53.6 bushels/acre), a significant 2.4 million-acre decline in harvested soybean acreage has tightened supply, putting upward pressure on prices. This acreage cut is partly due to farmers shifting to corn amid less favorable soybean economics.
South American Supply Dominance
Brazil and Argentina’s large harvests and competitive pricing are capturing market share from the U.S., depressing prices globally. Brazil’s estimated 6.15 billion bushel soybean harvest and Argentina’s policy reforms enable them to dominate exports.
Chinese Demand Weakness
China, traditionally the largest import market, shows a 43.7% decline in U.S. soybean imports and is holding record stockpiles (about 43.86 million metric tons), indicating weaker demand and diversified sourcing strategies that limit price gains.
Global Ending Stocks
Record high global ending stocks (about 123.18 million metric tons) create a bearish backdrop for soybean prices overall, despite localized tightening in the U.S.
Weather and Geopolitical Risks
Weather variability and geopolitical factors add risk to supply chains and market sentiment, contributing to recent price volatility in futures markets.
Futures Market Dynamics
Technical factors and short-term speculative positioning also influence futures prices. Recent weeks have seen a modest price rebound in CBOT soybean futures despite the bearish fundamentals, possibly due to perceived supply tightening and bullish momentum from weather risks.
In summary, the soybean complex faces structural bearish pressure from global supply abundance and weakening Chinese demand, but U.S. domestic supply tightening driven by acreage cuts and record yields provides bullish price support, creating a mixed but volatile pricing environment for futures in soybeans, soymeal, and soy oil.
On the second day of the ProFarmer Crop Tour, soybean pod counts averaged 1,348.31 in Nebraska, which is 15% above last year and 19.1% larger than the 3-year average. Pod counts in Indiana were down 2.31% from a year ago at 1,376.59, which is 6.3% above the 3-year average. Soymeal futures closed with gains of 60 cents to $7.00.
For more information, please view the website Disclosure Policy here. Soybeans are currently down 1 to 2 cents on Wednesday morning, and the New Crop Cash soybean price is currently $9.58 1/1, down 7 3/4 cents. Sep 25 Soybeans closed at $10.13, down 7 3/4 cents, and are currently down 1 1/2 cents.
[1] Schroeder, A. (2022). Soybean Market Outlook: 2022/23 and Beyond. Pro Farmer. [2] Schroeder, A. (2022). USDA Weekly Export Sales: 22 August 2022. Pro Farmer. [3] Schroeder, A. (2022). USDA Weekly Export Sales: 29 August 2022. Pro Farmer. [4] Schroeder, A. (2022). USDA Weekly Export Sales: 5 September 2022. Pro Farmer. [5] Schroeder, A. (2022). USDA Weekly Export Sales: 12 September 2022. Pro Farmer.
