Deteriorating U.S. crop conditions and Argentina`s soybean harvest results are adding pressure to soybean quotes

Traders are increasingly paying attention to the weather in the US, which is not conducive to the development of corn crops and especially soybeans. The prospect of minimal precipitation over the next 7-10 days continues to increase speculative demand for futures.

According to the report of the US Department of Agriculture, the condition of spring crops in the US for the week ended June 11 worsened due to higher than normal temperatures and lack of precipitation. Thus, 61% of corn crops were in good to excellent condition (-3% for the week; compared to 71% last year), 59% of soybeans (-3%; 70%) and 60% of spring wheat (-4%; 54 %).

Planting rates are higher thanks to the dry weather, and in the US soybeans are 96% planted compared to 87% last year, and spring wheat is 97% planted compared to 92% last year.

On the Chicago Stock Exchange, summer soybean futures rose 1.9% to $514.1 a tonne, up 7.7% since early June, and up 2.5% to $455.4 a tonne for November (+ 7.8%).

Traders await the NOPA report and expect US soybean processing to reach 4.79 million tonnes in May, a new record for the month. It will be recalled that US processors bought the first batches of soybeans from Brazil in order to increase processing volumes.

In Argentina, according to the Buenos Aires Grain Exchange, soybean harvesting has been completed on 94% of the area. The crop forecast is 21 million tons of soybeans, which is significantly less than the USDA’s June estimate of 25 million tons, and this will significantly reduce the supply of soybean meal and oil to the world market, so consumers will have to buy more American oil and meal.

Also in the exchange report, it is noted that soybean imports to Argentina during the first four months of this year reached a record for this period – more than 3 million tons, as the country’s processing enterprises tried to reduce the shortage of soybeans due to a decrease in their domestic production.

The port of Rosario, Argentina’s key agricultural shipping port, recorded its lowest number of soybean and corn trucks in at least 22 years.

It is noted that approximately 280,000 soybean and corn trucks arrived at the port during March-May this year, which is half of what it was during the same period in 2022 and 62% less than the average of the last five years.

Tags: prices, soybean, USA, Argentina