Soybean Prices Inch Higher, Capped by Abundant Supply from South America

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Illustration of soybean oil . Photo by: Pexels

PALMOILMAGAZINE, SINGAPORE – Soybean futures in Chicago experienced a slight increase on Tuesday, buoyed by short-covering that bolstered prices. However, the anticipation of robust production in South America tempered the overall gains.

Corn prices saw an uptick due to a diminished Brazilian crop outlook, and wheat also strengthened.

The primary soybean contract on the Chicago Board of Trade (CBOT) (Sv1) showed a 0.2% rise, reaching $12.26-1/4 per bushel as of 0238 GMT, following an almost 1% gain on Monday. Wheat (Wv1) increased by 0.2% to $5.97-1/2 per bushel, and corn (Cv1) inched up 0.1% to $4.46 per bushel.

“Soybean prices are firming after hitting lows last week,” said one Singapore-based oilseed trader. “There is some buying interest at these levels from investors.”

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Soybeans’ rally is being capped, however, by forecasts of record supplies from South America’s top producers, including Brazil and Argentina.

Brazil’s 2023/24 soybean harvest had reached 6% of the planted area, as of last Thursday, agribusiness consultancy AgRural said on Monday, up 3.7 percentage points from the previous week and above the 1.8% seen in the year-ago period.

China’s soybean imports from Brazil in 2023 jumped 29% from the prior year, customs data showed on Saturday, expanding the South American grower’s dominance in the world’s largest soybean market and eating into the U.S. market share.

Forecasters expect lower production from Brazil’s second corn crop because of smaller planted area, lower investment by farmers and the intense El Niño weather pattern, which brought drought to central Brazil and excess rains to the south.

Russian wheat export prices continued to decline last week following a drop in global markets, while shipments also fell amidst challenging weather conditions, analysts said. Source: Reuters

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