Soybean Prices Rise as Supply Concerns Grow
USDA Reports Lower Yields and Tighter Stocks
Soybeans saw midday gains on Friday, climbing by 16 to 24 cents. This follows the U.S. Department of Agriculture’s (USDA) announcement of yield cuts and tighter stock levels. CmdtyView’s national front month cash bean price rose 22 cents to reach $9.65 1/2. Meanwhile, soymeal futures dipped by 10 cents per ton, while soy oil futures increased by 229 points during the session. The Biden Administration is expected to release short-term guidance on the 45Z tax credits soon.
The morning’s Export Sales report revealed soybean sales for the 2024/25 marketing year at just 288,671 metric tons (MT), marking a record low and falling short of the estimated range of 400,000 to 1.3 million MT for the week of January 2. Notably, the Netherlands purchased 205,400 MT, with China receiving 171,800 MT. Additionally, net reductions totaled 696,100 MT from unknown destinations, primarily switched to other locations.
The meal sales for the week stood at 144,918 MT, the lowest figure of the marketing year. Soybean oil sales were reported at 34,634 MT, within the expected range of 20,000 to 60,000 MT.
According to this morning’s Crop Production report, soybean yields dropped by 1 bushel per acre (bpa) to a total of 50.7 bpa, which is below market expectations. Additionally, USDA reduced the harvested acres by 250,000 acres to 86.05 million. This adjustment contributed to a drop in production of 95 million bushels (mbu), resulting in a total of 4.366 billion bushels (bbu). With reduced supplies, December 1 stocks were updated to 3.099 bbu, which is 112 mbu lower than estimates and 98 mbu higher than the previous year. Furthermore, the USDA’s World Agricultural Supply and Demand Estimates (WASDE) lowered the ending stocks projection by 90 mbu to 380 mbu, which is 77 mbu below expectations.
On the global front, the USDA maintained its figures for Brazil and Argentina. Worldwide, ending stocks were also reduced to 128.37 million metric tons (MMT), down by 3.5 MMT from December and significantly under analyst predictions for an increase.
Jan 25 Soybeans are trading at $10.08 1/4, up 16 cents.
Nearby Cash is at $9.65 1/2, up 22 cents.
Mar 25 Soybeans are at $10.22 1/2, up 23 1/2 cents.
Jul 25 Soybeans are at $10.45, up 21 3/4 cents.
On the date of publication, Austin Schroeder did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
