Yesterday, soybean futures in Chicago fell as investors awaited U.S. inflation data and sought further signs on Brazilian weather and Chinese demand. The main soybean contract of the Chicago Board of Trade (CBOT) fell 0.9% to US$13.7075 per bushel. It had risen to US$13.86 on Monday, the highest level since August 31. Corn and wheat also retreated.
The consulting firm AgRural on Monday lowered its forecast for Brazil’s 2023/24 soybean production by 1.1 million tons to 163.5 million tons and said further reductions are likely this month. The hot and dry weather in Brazil, the world‘s largest soybean exporter, has heightened concerns as farmers plant the next crop. The weather could impact the soybean harvest as well as the second-crop corn output.
Vitor Pistoia, an analyst at Rabobank in Sydney, said, “The soybean harvest doesn’t look good.” However, there may be some relief as scorching temperatures this week are likely to ease next week due to increased rainfall.
The surge in U.S. soybean sales to China also contributed to the support of the soybean market. U.S. exporters sold 204,000 tons of soybeans for 2023/2024 delivery to China, the U.S. Department of Agriculture said on Monday.
CBOT corn fell 0.7% to $4.74 a bushel, while CBOT wheat fell 0.9% to $5.74 a bushel. Wheat markets shrugged off an unexpected drop in the USDA’s weekly estimate for U.S. wheat conditions, with crop ratings remaining at four-year highs. Analysts believe that competitively priced Russian wheat and signs from Ukraine that shipping corridors are working are holding down wheat prices.
Financial markets broadly consolidated after U.S. inflation data late on Tuesday were seen as an indicator of interest rate policy in the world‘s largest economy. The market is likely to remain volatile in the near future as the soybean market is driven by concerns about weather and demand.