Before we get into the supply and demand factors impacting soybeans this month, let’s take a look at the performance of soybean prices.
In the month of September, front-month soybean prices were about 0.5% higher than where August ended, but 13% below this time a year ago. Soybean prices were also lower than the 5-year average for the end of September.
Front-month soybeans prices in Q3 were down 4% since Q2.
Harvest pressures and an ongoing trade dispute between the United States and China continue to weigh on soybean prices. As we explained last week, the U.S. remains awash in soybeans, which has fueled a sharp uptick in crushing operations and left the nation with a glut of soybean oil.
That soybean oil glut has had a pronounced impact on both soybean prices and canola prices on both sides of the border. Meanwhile, China’s crush sector is expected to require fewer soybeans than previously estimated thanks to rising prices and the nation’s struggle with swine fever.
Earlier this week, the Trump administration slapped 10% tariffs on another $200 billion in Chinese goods and said it will hike these tariffs to 25% by the end of the year. China responded with tariffs on a smaller amount of U.S .goods (about $60 billion) and accused the United States of bullying Beijing. The tariffs come at a time that China is likely to return to the U.S. market to obtain beans as supply in South America remains limited.
Last week, Statistics Canada reported a larger soybean crop than previously estimated. The agency pegged soybean yields in the Great White North to 44.1bushels per acre. This is up from the 39.3reported a few weeks ago in their first estimates of Canadian soybean production.
For our GrainCents readers, we’re watching a variety of factors that might affect soybean prices: 7 are noise, 3 are bearish, 3 are bullish.
(If you’re not familiar with what “noise” is, then we recommend you check out our GrainCents risk management process towards soybean prices.)
This month, GrainCents investigated topics such as:
- Trump’s Farmer Aid program (and resulting price slumps),
- A record US soybean crop, and
- Global soybean S&D shakeups in the September WASDE report.
Hedge fund managers turned more bearish on soybean prices by the end of September. As of September 25, money managers had a net short position on soybeans of 58,614 contracts.
As we head into October, out attention will focus on harvest pressures, planting progress in South America, U.S. exports, and the upcoming WASDE report.
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