Soybeans Sink to Four-Year Low Amid Record Brazil Crop Prospects, Weak Soyoil Demand
Source: DairyNews.today
Chicago soybean futures dropped to a four-year low on Wednesday, weighed down by forecasts of a record-breaking Brazilian harvest and declining soyoil prices after a U.S. spending bill excluded biodiesel support. Corn futures also fell, while wheat prices fluctuated as traders assessed mixed global production outlooks.
The most-active soybean contract on the Chicago Board of Trade (CBOT) fell 24 cents to $9.52-1/2 a bushel by 1800 GMT, after hitting $9.54-1/4 a bushel earlier, the lowest level since September 2020. Soybeans have faced sustained pressure this week, with contracts hitting lifetime lows in consecutive sessions.
Record Brazilian Crop and Global Pressure
In Brazil, the world’s largest soybean producer and exporter, consistent rainfall has alleviated drought conditions, setting the stage for a record harvest of 171.5 million metric tons, according to consultancy AgRural. The strong Brazilian outlook has added downward pressure to U.S. soybean futures, which are already contending with a stronger dollar that makes U.S. commodities less competitive globally.
Soyoil prices also tumbled following Tuesday’s announcement that a stopgap U.S. government funding bill excluded biodiesel incentives. The absence of agriculture-related policies in the proposed legislation has raised concerns about future demand for renewable fuels.
Broader Market Trends and Technical Factors
“The market is experiencing a technical sell-off as prices breach key support levels,” said Joe Davis, a trader at Futures International. “The bearish sentiment is attracting additional selling as the decline continues.”
Corn futures followed soybeans lower, with the CBOT’s most-active contract down 5-3/4 cents to $4.37-3/4 a bushel. Wheat futures slipped 3 cents to $5.42 a bushel, caught between contrasting production trends globally.
Mixed Wheat Outlook
Sovecon, a prominent agricultural consultancy, slashed its forecast for Russia’s 2025 wheat production by 3 million metric tons to 78.7 million tons, citing the worst crop conditions in decades. However, robust harvests in Argentina and Australia have exceeded expectations, adding pressure to global wheat prices.
As traders navigate these global shifts, the outlook for U.S. grain markets remains bearish, with no immediate catalysts for recovery in soybean and corn futures.
Record Brazilian Crop and Global Pressure
In Brazil, the world’s largest soybean producer and exporter, consistent rainfall has alleviated drought conditions, setting the stage for a record harvest of 171.5 million metric tons, according to consultancy AgRural. The strong Brazilian outlook has added downward pressure to U.S. soybean futures, which are already contending with a stronger dollar that makes U.S. commodities less competitive globally.
Soyoil prices also tumbled following Tuesday’s announcement that a stopgap U.S. government funding bill excluded biodiesel incentives. The absence of agriculture-related policies in the proposed legislation has raised concerns about future demand for renewable fuels.
Broader Market Trends and Technical Factors
“The market is experiencing a technical sell-off as prices breach key support levels,” said Joe Davis, a trader at Futures International. “The bearish sentiment is attracting additional selling as the decline continues.”
Corn futures followed soybeans lower, with the CBOT’s most-active contract down 5-3/4 cents to $4.37-3/4 a bushel. Wheat futures slipped 3 cents to $5.42 a bushel, caught between contrasting production trends globally.
Mixed Wheat Outlook
Sovecon, a prominent agricultural consultancy, slashed its forecast for Russia’s 2025 wheat production by 3 million metric tons to 78.7 million tons, citing the worst crop conditions in decades. However, robust harvests in Argentina and Australia have exceeded expectations, adding pressure to global wheat prices.
As traders navigate these global shifts, the outlook for U.S. grain markets remains bearish, with no immediate catalysts for recovery in soybean and corn futures.
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