On Tuesday, the price of soybean futures tumbled amid higher output guidance driven by improved rainfall in Brazil and Argentina.
US soybean futures for January delivery retreated 1.09% to ¢1,312.50 per bushel on December 19. Still, analysts predict a 0.47% rebound to ¢1,318.62 a bushel in the coming market session.
Weather forecasters expect rain showers in central and northern Brazil in the week ahead. The world’s top soybean exporter, responsible for 50.00% of soy shipments in 2022, has struggled with arid weather this year.
US Commodities President Don Roose said next week’s rainfall will impact soybean prices for the remainder of 2023. The El Niño phenomenon has caused Brazilian weather to become highly erratic and relatively difficult to predict.
Meanwhile, the US Department of Agriculture (USDA) reported exports of 132,000.00 metric tons to unspecified locations. It also showed through the daily reports that demand for grain remains high locally and abroad.
The agency anticipates a sharp decline in US soy shipments to China if Brazil’s weather improves. China has been a longstanding agricultural partner of Brazil and is only using US crops as an alternative option until Brazil’s harvests recover.
While Brazil’s soybean production is being held back, its oilseed sector has thrived. The country’s yearly oilseed exports exceeded 100.00 million metric tons for the first time on record in 2023.
Argentinian Storm Grants Relief to Soybean Farmers
Over the weekend, a harsh summer storm ravaged parts of Argentina, bringing winds with speeds of up to 140.00 kilometers per hour to the southwestern port city of Bahía Blanca.
Soybean farmers welcomed the rain showers that landed on their struggling fields. For most of 2023, Argentina’s soy-producing regions have faced their worst drought in over 60 years.
As a result, soy harvests in the country have fallen to their lowest level in more than 25 years. According to the Buenos Aires Grain Exchange, Argentina’s total soybean harvest is expected to barely reach 21.00 million tons this year.
Still, with La Niña ending, the organization estimates soy output will rebound to 50.00 million tons in 2024. The USDA also anticipates a bounce back in Argentinian soy yield next year, although at a lower 48.00 million tons.
