Soybean prices hit a two-and-a-half-month low

Soybean prices fell to a two-and-a-half-month low after the U.S. Department of Agriculture on Monday revised its export outlook for the United States and raised its estimate for the Brazilian crop, a competing supplier, while wheat futures followed declines in corn and soybean prices.

According to traders, soybean futures on the Chicago Board of Trade dropped on Tuesday to their lowest level in more than 2.5 months, pressured by large supply volumes and favorable weather conditions for crop development in Brazil, a rival producer.

Rains expected in some regions of Brazil are likely to boost output, which is widely expected to be a record harvest.

Soybean prices also declined amid concerns that the recent surge in Chinese purchases of U.S. soybeans could come to an abrupt halt once Brazil’s harvest begins and when Beijing reaches its target of 12 million metric tons of purchases from the current U.S. crop.

The U.S. Department of Agriculture reported on Tuesday that private exporters sold 168,000 metric tons of U.S. soybeans to China, as well as 152,404 tons to Mexico.

According to traders, China’s state-owned company Sinograin sold all 1.1 million metric tons of soybeans offered at its fourth auction since December on Tuesday, seeking to reduce stocks ahead of deliveries from the United States.

March soybean futures on the CBOT settled down 10 1/4 cents at $10.38 3/4 per bushel. During the session, the most active contract fell to $10.37 3/4 per bushel, the lowest level since October 23.

CBOT March soybean meal futures fell $6.70 to $291.60 per short ton.

March CBOT soybean oil futures rose 0.93 cents and closed at a one-month high of 51.20 cents per pound, supported by hopes for improved demand from biofuel producers.

According to dealers, basis bids for soybean meal in the U.S. Midwest were steady on Tuesday, while futures prices dropped sharply.

European traders said that South Korea’s Korea Feed Association (KFA) purchased about 60,000 tons of soybean meal of U.S., Chinese, or South American origin at an international tender on January 13.

The product was bought from COFCO at a price of $371.71 per ton C&F (including a premium for additional port unloading).

Delivery of the contracted meal to the buyer is scheduled by May 30 this year. If shipped from South American countries, it is to arrive in South Korea between March 15 and April 15.

In addition, at another tender also held on January 13, NOFI, a leading South Korean animal feed producer, purchased a similar volume of soybean meal of South American origin.

The meal was bought from Olam at $373.8 per ton C&F (including a premium for additional port unloading). The contracted product is to be delivered to the importer by May 25 this year.

Tags: prices, soybean