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CBoT Soybeans Settle Lower on Expectations of Better U.S. Rains; WASDE Lowers 2020-21 Soybean Output Estimate

11 Jul 2020 8:11 am
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Mumbai (Commodities Control) – Chicago Board of Trade soybean futures dropped on Friday on improving U.S. weather forecasts and uncertainty over demand from top-importer China, analysts said.

CBOT August soybeans settled down 9-1/4 cents at $8.87-1/4 per bushel and touched its lowest price since July 1. The contract ended down about 0.4% on the week.

July Soybeans closed at $8.91 1/2, down 6 3/4 cents. September Soybeans closed at $8.85 1/2, down 9 3/4 cents and November Soybeans closed at $8.90 3/4, down 10 3/4 cents.

CBOT August soymeal slid $4.80 to $292.50 per short ton, while August soyoil slipped 0.07 cent to finish at 28.22 cents per pound.

Analysts said U.S. weather forecasts looked wetter in crop-growing areas that were previously expected to be unfavorably hot and dry.

The U.S. Department of Agriculture, in a monthly report, pegged domestic soybean production at 4.135 billion bushels, up from its June outlook for 4.125 billion bushels. Average yield expectations were unchanged at 49.8 bushels per acre.

Shifting residual use from 4 mbu to a negative 46 mbu, 2019/20 carryout was up to 620 mbu. New crop ending stocks were also up by more than expected, with a 30 mbu bump to 425. Despite the larger ending stocks, USDA raised the new crop bean cash price 30 cents to $8.50/bu.

The 2020/21 global oilseed supply and demand forecasts include lower production, lower exports, higher crush, and lower ending stocks compared to last month. Global oilseed production is reduced 2.0 million tons to 604.2 million on lower rapeseed, cottonseed, and soybean production. Canola production is lowered for Canada based on updated government data.

World bean carryout was increased 480,000 MT to 99.7 MMT for old crop, but new crop was 1.26 MMT lower at 95.08 MMT. Brazilian old crop bean production was hiked to 126 MMT, larger than any of the published pre-report estimates.

U.S. President Donald Trump said he is not thinking about negotiating a "Phase 2" trade deal with China as relations between Washington and Beijing sour over the coronavirus pandemic and other issues.

As part of an initial trade deal in January, China, the world's top soybean importer, pledged to significantly increase purchases of U.S. farm goods.

Meanwhile, in the weekly CoT report, soybean speculative traders were 99,243 contracts net long on July 7. That was the largest net long since May 29 of 2018. Managed money’s net short in soymeal was down 58% wk/wk to 21,910 contracts. Managed money expanded their net long in soybean oil to 19,418 contracts (the largest net long since Feb 25th).

Commodity funds were net sellers of Chicago Board of Trade soybean, soymeal and soyoil futures contracts on Friday, traders said.

Support and Resistance for active contract lies at $8.77 and $9.11 per Bushel, respectively.

(Commodities Control Bureau)

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