September 2018 Soybeans Prices Recap – FarmLead (GrainCents)

Before we get into the supply and demand factors impacting soybeans this month, let’s take a look at the performance of soybean prices.

Soybean stocks vs. prices (US)

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:

 

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.

If you want to be more on top this sort of thing so you can make more sense of grain markets, join us for your free trial at GrainCents.

About the Author
Brennan Turner

Brennan Turner is the CEO of FarmLead.com, North America’s Grain Marketplace. He holds a degree in economics from Yale University and spent time on Wall Street in commodity trade and analysis before starting FarmLead. In 2017, Brennan was named to Fast Company’s List of Most Creative People in Business and, in 2018, a Henry Crown Fellow. He is originally from Foam Lake, Saskatchewan where his family started farming the land nearly 100 years ago (and still do to this day!). Brennan's unique grain markets analysis can be found in everything from small-town print newspapers to large media outlets such as Bloomberg and Reuters.

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