Soybean prices in Chicago fell on Monday to their lowest level since October 2020, as forecasts for rain in USA eased concerns about the potential impact of hot, dry weather on crop yields, while in Uruguay A drop in the value of tons is expected for the next harvest.
Corn was trading flat, while wheat gained strength on export demand, analysts said. However, the market was awaiting figures from the weekly report of the United States Department of Agriculture (USDA) on the progress and status of crops.
After midday, the most active soybean contract on the Chicago Board of Trade (CBOT) was down 13.75 cents at $10.3475 a bushel while CBOT corn was up 1 cent at $4.11 a bushel.
The market had initially anticipated that extreme heat and dryness over the US Midwest would reduce production of corn and soy, But the latest weather forecasts indicated that the hot, dry weather would be temporary, analysts had said.
Meanwhile, in the Uruguayan market, a ton of soybeans is around US$370, although there are still hundreds of tons without a set price. Meanwhile, for the next harvest, a value of US$348 per ton is expected, with a premium of more than US$50 at present.
For its part, sowing decisions for the next harvest are under pressure from the maintenance of costs but the adjustment in prices, which leads to the need for greater productivity for the crop to be profitable.
What’s up with wheat?
Meanwhile, the wheat U.S. wheat rose 7.5 cents to $5.31 a bushel on demand following the U.S. export inspection data as well as poor conditions in the EU. “Wheat is at the higher end of inspections,” said Jim Gerlach, president of A/C Trading. The USDA put the number of wheat export inspections for the week ending July 25 at 431,233 metric tons.
In Uruguay, wheat and barley were successfully planted in the west, although in slightly less favorable conditions in the center of the country. Meanwhile, they are waiting for the rains, as they need them to improve the prospects for the winter cycles.
China effect
He United States Department of Agriculture (USDA) adjusted downwards previous projections for imports of soy of China, and estimated that, although it will remain stable in the 2024/2025 period, this year it will buy 103 million tons, instead of the expected 105 million.
For next year, meanwhile, the adjustment was from 109 to 103 million tonnes. This means that the record will remain at 104.5 million tonnes in 2022/23.
Also, the Domestic consumption was reduced by the same proportion, 6 million tonnes less than in the previous USDA forecast, to stand at 120.8 MT.
Confirmation of a lower demand for primary products It is always bad news for the country, even more so if it comes from the main market for the placement of this type of goods. Uruguay.
In this regard, the export market is already suffering the consequences of the slowdown of the Chinese economy, mainly with regard to the placement of meat and derivatives. A scourge that is deepened by the fall in commodity priceswhich further harms local trade.
Although for several months now Brazil dethroned her at the top of the list, China It still remains a key player in the Uruguayan economy, Therefore, the future of the Asian giant is closely observed from the territory.
At the global level, the US elections have put the spotlight on the market with China given the possibility that the right-wing Donald Trump will win, who had several confrontations with the Asian giant during 2019 and 2020 that led to the market being liquefied.
Source: Ambito
