Soybean Futures Experience Decline Amidst Mixed Data

Recent losses in soybean futures and mixed USDA export data signal potential volatility in agricultural commodities. Negative price movements could impact companies involved in soybean production and trading.

Date: 07-09-2024

AI Rating: 4

Soybean futures observed significant losses, with nearby contracts decreasing by 18 to 19 cents. The week's total gain for November futures was barely noticeable at just a nickel, indicating a downward trend. Soymeal futures fell by $1.90 per ton, while Soy Oil experienced a drop of 142 points.

The USDA's delayed weekly export sales data presents a complex picture: net reductions were recorded at 227,961 MT for the week of August 29, which was slightly below the anticipated range of net cancellations and net sales around 200,000 MT. However, new crop sales were robust at 1.66 MMT, exceeding forecasts ranging from 0.8 to 2 MMT, indicating demand strength. China was identified as a principal buyer with 1.002 MMT purchases.

In terms of meal sales, totals amounted to 40,897 MT for the 2023/24 marketing year, with a more substantial figure of 434,708 MT registered for 2024/25 during the same week. This total of 475,605 MT marked the largest sales since late June. Bean oil sales were considerably lower, with only 1,922 MT reported for 2023/24 shipments.

CFTC data reveals that speculators covered 22,455 contracts, lowering their net short position to 154,096 contracts—the smallest level since early July. Commercials have also modified their positions, trimming their net long exposure by 14,075 contracts to a total of 62,032 contracts.

The recent declines in soybean future prices—such as Sep 24 closing at $9.89 1/4 (down 19 cents) and Nov 24 at $10.05 (down 18 1/2 cents)—may affect investor sentiment regarding stocks tied to the agricultural sector. This wave of negative price movement, accompanied by mixed data on sales and purchases, creates uncertainty around profitability in the soybean market, which could affect stock prices of related companies.

Stocks: ADM BG CAG CHS FMC NTR TSN