Soybean futures are failing to snap their three-session losing skid in the middle of the trading week, driven by the US government projecting that American farmers are set to export a record amount of the agricultural commodity in the 2020–2021 marketing season. Exporters are attempting to take advantage of soybean prices that are testing their best levels in four years. But could a potential supply glut send prices tumbling and end the double-digit rally? January soybean futures tumbled %excerpt%.0425, or 0.37%, to .5775 per bushel at 17:03 GMT on Wednesday on the Chicago Board of Trade (CBoT). Soybean prices have slumped about 2% so far this week, but they remain up 21% year-to-date. According to the US Department of Agriculture (USDA), domestic producers are projected to export a record
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Soybean futures are failing to snap their
January soybean futures tumbled $0.0425, or 0.37%, to $11.5775 per bushel at 17:03 GMT on Wednesday on the Chicago Board of Trade (CBoT). Soybean prices have slumped about 2% so far this week, but they remain up 21%
According to the US Department of Agriculture (USDA), domestic producers are projected to export a record amount of soybeans. But the estimates are still unchanged from the previous forecast in September. Corn exports are also anticipated to reach
In a separate report, the USDA stated that farmers had increased production by 40% this year to satisfy foreign demand and take advantage of higher prices.
What explains the slump in soybean prices? For the most part, it has been a
In the last week, there has been speculation that the soybean rally may have come to an end after it was reported that Chinese importers and processors are trying to exit their agreements with American and Brazilian exporters. The problem is that crush margins have turned negative amid vast supplies of soybeans. Since the summer, China has accounted for about 60% of global shipments. Beijing might have an oversupply of the crop, which might justify expectations that demand would weaken heading into 2021.
China had been playing a game of catch up since the fallout of the coronavirus pandemic, attempting to adhere to the provisions inside the
The world’s top soybean consumer had also been taking advantage of a sliding US dollar and Brazilian real. The buck has slumped 15% since hitting a peak of 103.00, while the real has been one of the
In other agricultural markets, January corn futures tacked on $0.0325, or 0.77%, to $4.24 per pound. January wheat futures added $0.1025, or 1.78%, to $5.875 a bushel. March coffee futures slipped $0.0015, or 0.13%, to $1.1895 a pound.
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