On Monday, soybean futures slid, marking their four-session low amid rainfall forecasts in Argentina after the drought.
The soy contracts for March delivery declined by -0.83% to $1,496.50 per metric ton on January 23’s Asian afternoon session.
Rain is expected to pour down on dry growing areas in Argentina, which can ease concerns about supply.
On Thursday, the Buenos Aires grains exchange said storms would bring moderate to abundant rainfalls across Argentina. This can contribute to the farmers planting their crops after a historic drought.
Meanwhile, Brazil is on its way to producing a record soy crop to quicken a seasonal shift. This may drive the export demand away from US supplies.
On January 17, analysts expanded their net long in Chicago Board of Trade (CBOT) soybean futures to 168,298 contracts. It’s the largest since April. Also, it involves an increase of more than 36,000 contracts, the more for any week in almost a year.
On a bullish note, it was a mix of the products in dry weather in South America. It decreased harvests in Brazil, Argentina, and Paraguay. The Argentine drought enticed fund buying in soybean and soybean meal. However, many have attributed the strong commodity shipments to delayed harvest pace with larger-than-normal amounts but unshipped export sales. This can lead to a need for a more considerable shipment pace for the first half of February.
China Soybean Self-Sufficiency Improves
On Thursday, the Ministry of Agriculture and Rural Affairs (MOA) in China met with soybean industry participants. The organization urges the participants to boost the product’s production and sales as the nation expects a market rebound.
According to experts, this is a part of the government’s effort to improve the self-sufficiency rate of soybean supplies. The country targets a balance in the risks of heavily relying on a single source, such as the US. It is responsible for one-third of China’s soybean supply.
The parties that attended the event, like domestic soybean industry associations, were asked to have better market monitoring.
In 2022, soybean’s self-sufficiency rate rose by 3.00% year-on-year.
