Soybean futures settled lower on Monday as a rising US dollar and slumping Chinese demand weighed on the agricultural commodity. Soybeans have had a rough week as the resurgence in coronavirus cases, as well as disappointing US exports data, affected crop prices. Will soybean prices also be impacted by the results of the 2020 presidential election?
November soybean futures slipped $0.055, or 0.52%, to $10.51 per bushel at 18:12 GMT on Monday on the Chicago Board of Trade (CBoT). Soybean prices fell more than 3% last week, but they did report a monthly gain of 3%. Year-to-date, soybean is up about 7%.
New data from S&P Global Platts highlighted that Chinese state-owned firms, which are the biggest buyers of US soybeans, have suspended purchases in the last couple of weeks. The last time Beijing made a significant purchase was toward the end of September. China’s private crushers’ demand for US soybeans could also be less than two million metric tons for December and January.
Robust Chinese demand has supported soybean prices, elevating them to their highest level in about two years. But what happened?
The analysis is split, but some contend that Beijing could be waiting until after the 2020 presidential election resume buying again. Others assert that China is buying from Brazil again due to ample supplies and a weaker Brazilian real.
Meanwhile, according to the US Department of Agriculture (USDA), US soybean exports plunged 26% in the week ending 29. In total, American export inspection volumes totaled 14.34 million metric tons in the week ending October 22, up from eight million metric tons year-over-year. Most of the shipments were destined for China.
The coronavirus pandemic is weighing on both soybeans and the broader financial markets. The US recently recorded new single-day infections above 100,000. Europe has started a second wave of COVID-19, resulting in new lockdowns and restrictions in several major economies, including Great Britain, which instituted a stay-at-home order.
Globally, total cases are closing in on 47 million, with a death toll of 1.2 million. Also, more than 31 million people have recovered from the highly infectious respiratory illness.
A slightly higher greenback contributed to soybean’s slide. The US Dollar Index, which measures the greenback against a basket of currencies, rose 0.04% to 94.07, from an opening of 93.89. A stronger buck is bad for commodities priced in dollars because it makes it more expensive for foreign investors to purchase.
In other agricultural commodities, December corn futures shed $0.025, or 0.63%, to $3.96 per pound. December wheat futures tacked on $0.0925, or 1.55%, to $6.0775 a bushel. December coffee futures dipped $0.004, or 0.39%, to $1.024 per pound.