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CBOT Soybean Futures End Down On Trade Talks Uncertainty; Acreage Shift

18 May 2019 8:38 am
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Mumbai (Commoditiescontrol) –Chicago Board of Trade (CBOT) soybean futures dropped over 2 percent on Friday, as traders showed increasing concerns over uncertainty about the trade talks between the United States and China.Further market was concerned about acreage shift from corn to soybeans as spring planting progressed.

The most active soybean contract for July delivery went down 18 cents to close at $8.21-3/4/bu.

Earlier this week soybeans recovered from last Friday’s low of $7.91/bu to high of $7.48-1/2 on may 15, mainly on concerns of delayed planting due to wet weather. Delayed planting will delay the crop harvest and may impact yield also.

But on Friday market gave up some of its gains as media reported quoting two unnamed sources that the negotiations have stalled and scheduling for the next round of talks is in “a flux” as it is unclear what the two sides would negotiate. Meanwhile, the US also blacklisted Chinese telecommunications company Huawei, which has further soured relations. These development has reduced the chances of China buying US soybeans in the near future.

Apart from this weather fundamentals are indicating the shift of acreage from corn to soybeans.

Commitment of Traders data shows managed money spec funds adding 8,282 contracts to their record net short position of 168,835 contracts in the week ending May 14.

Since speculators continue to add short position it appears the market is likely to move further down.Unless there is some more adverse news on the weather front which may compel shorts to cover their position and lead to the price recovery.

July 19 Soybean Meal closed at $294.30/MT, down $7.60, July 19 Soybean Oil closed at $27.22, down $0.50/lb

Support for July contract is $8.32 and support is $ 8.14/bu.

(By Commoditiescontrol Bureau; +91-22-40015513)

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