Soybean Falls Below $10 As Foreign Demand Firms

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Soybean futures have slipped below $10 for the first time since the middle of September. The crop is coming off a weekly loss of about 2%, but it is still on track for a huge monthly gain. Soybean prices have been slumping on weakening foreign demand, as well as expectations that the US government’s ratings will deteriorate in the next crop progress report.

November soybean futures tumbled $0.0575, or 0.57%, to $9.9675 per bushel at 17:20 GMT on Monday on the Chicago Board of Trade (CBoT). Soybean prices are poised for a September gain of around 5%, lifting their year-to-date rally to more than 4%.

US soybeans have been on a downward trend in recent sessions as foreign buyers have been quiet with their acquisitions of American crops. However, before the slight slowdown in purchases, there has been robust demand for soybean.

In the 2020-2021 marketing season, US soybean export sales have surged 192% year-over-year to 35.5 million metric tons. China has accounted for most of the purchases as Beijing attempts to meet the provisions of the phase one trade agreement with the US. Chinese has also been trying to revive its pork and poultry market following the African swine flu that decimated the domestic industry. Soybean-based animal feed is critical to the resuscitation of this market.

dollarChina has also been turning to Brazil for a lot of its soybean needs. With ample supplies and a weakening real, Beijing took advantage of lower soybean prices. But since the South American country could not satisfy demand, China returned to the US market.

Meanwhile, a stronger US dollar has weighed on soybean and other commodities. The US Dollar Index, which measures the greenback against a basket of currencies, has risen more than 2.3% in September. The index is still down roughly 2% year-to-date, but the resurgence has impacted American agriculture since it makes dollar-denominated commodities more expensive to purchase.

In other agricultural markets, November corn futures rose $0.03, or 0.82%, to $3.6825 per pound. November wheat futures added $0.0425, or 0.78%, to $5.485 a bushel. December coffee futures dipped $0.0035, or 0.32%, to $1.092 a pound.

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