Soybean Stocks Hit Record High
The U.S. has the most soybeans in storage according to the USDA. Farmers in the U.S. are expected to plant more corn and fewer soybeans than expected. As a result, the CME Group farm markets have reacted negatively to the USDA reports on Friday. May soybean futures ended at $8.84. July soybean futures closed at $8.97. May soymeal futures closed unchanged at $306.50. May soy oil futures closed at 28.36 per pound.
It is obvious price have declined compared to last week. Again, it is surprising to see price decline because the Data from USDA indicated farmers will plant fewer soybean, therefore this information should be a positive foundamental to increase prices on CME but the vice versa happened.
The flip side the situation is, there is high stock of soybean in storage (supply) which outweigh demand thereby dragging prices down. But then, once all the surplus soybean in storage are sold, the USDA Data about fewer soybean plantation in the future will serve as a long term price driver to surge prices.
Sources:
https://www.agriculture.com/us-soybean-stocks-hit-record-high-usda-data-drops-markets
No comments:
Post a Comment