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Soybean Rebounds As Wet Weather Threatens 2019 Yields

Summary:
Soybean futures are rebounding on Tuesday as the latest forecasts show wet weather in the US plains. If these weather patterns persist, then analysts warn that they could threaten soybean and corn yields in 2019. Meanwhile, as American farmers transition away from soybean and into other crops amid the US-China trade war, foreign markets are taking advantage and ramping up their output levels.  July soybean futures rose %excerpt%.1325, or 1.59%, to .45 per bushel at 15:01 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybean prices have advanced nearly 2% over the last week, but they are still down 5% on the year and 18% over the last 12 months. Last week, the US Department of Agriculture (USDA) reported that crop planting is still behind in 17 of the 18 states that produce corn

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Soybean futures are rebounding on Tuesday as the latest forecasts show wet weather in the US plains. If these weather patterns persist, then analysts warn that they could threaten soybean and corn yields in 2019. Meanwhile, as American farmers transition away from soybean and into other crops amid the US-China trade war, foreign markets are taking advantage and ramping up their output levels. 

July soybean futures rose $0.1325, or 1.59%, to $8.45 per bushel at 15:01 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybean prices have advanced nearly 2% over the last week, but they are still down 5% on the year and 18% over the last 12 months.

Last week, the US Department of Agriculture (USDA) reported that crop planting is still behind in 17 of the 18 states that produce corn and soybean. The US government is projecting that the soybean crop will yield 4.15 billion bushels, down from 4.54 billion bushels in 2018. Officials also estimate that the corn crop will come in at 15 billion bushels, up from 14.3 billion bushels. 

Based on the latest weather forecasts that show heavy rainfall in the Midwest, AccuWeather believes corn and soybean yields will be less than what the USDA is forecasting. The weather agency prognosticates that the 2019 soybean crop will be 4.1 billion bushels, while the corn crop will clock in at 14.2 billion bushels. 

More wet weather is expected in the Midwest Tuesday into Wednesday, including flooding downpours, hail and possible tornadoes, as well as this weekend. 

The latest hiccup in domestic soybean production comes as a growing number of US farmers are substituting the soybean crop for a wide array of other agricultural commodities. 

With fewer US supplies hitting global markets, other foreign players are attempting to grab market share.

As part of efforts to stop relying on the US for its soybean consumption, China has initiated a five-year plan to boost domestic output of the oilseed. In its second year, China said that it already anticipates production levels to surge to their best levels in 14 years during the 2019–2020 season. 

In the 2019 crop year, India is planting more land to grow soybeans as prices climb to an eight-month high. Similar to the situation in the US, Indian farmers are transitioning away from various commodities, such as cotton, and into soybeans. 

The world’s third-largest soybean grower, Argentina, is anticipated to see production surge 48% year on year, thanks to favorable weather conditions and a subsequent high crop yield. This is up 2% from its previous estimate in April. 

In other commodities markets, July wheat futures spiked $0.10, or 2.09%, to 8.4175 per bushel. July corn futures jumped 0.0725, or 1.82%, to $3.96 a pound. July orange juice futures dipped $0.01, or 1.00%, to 99.25 cents per pound. 

If you have any questions and comments on the commodities today, use the form below to reply. 


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Andrew Moran
I am a full-time professional writer. Prior to my self-employment, I worked as a reporter for Digital Journal covering the politics beat and The Toronto Times reporting on the city’s entertainment scene. I currently write mostly about business, marketing and finance

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