Forexpros – Soybean futures were largely unchanged on Monday, trading close to Friday’s six-month high as traders were reluctant to push prices higher amid speculation prices at these levels will lead to a slowdown in global demand for the oilseed.
On the Chicago Mercantile Exchange, soybeans futures for May delivery traded at USD13.3788 a bushel during European morning trade, easing up 0.02%.
The May contract traded in a tight range of USD13.3262 a bushel, the session low and USD13.4062, the daily high. Prices rose to USD13.5500 a bushel on Friday, the highest since September 19.
In its Supply & Demand Estimate Report published Friday, the U.S. Department of Agriculture said that global soybean production was expected to total 245.07 million tons in the current marketing season, down from 264 million harvested a year earlier.
The 19-million-ton drop is the biggest year-over-year decline since at least 1965.
The downward revision reflected lower production in major South American soy growers, Brazil and Argentina.
Combined soybean production in Brazil and Argentina, the two biggest growers after the U.S., will fall to 115 million tons from 124.5 million last year and 127 million forecast in December.
Agribusiness financial service provider Rabobank said in a report following the USDA data that the declining production in South America “will continue to give soybeans further upside.”
The bank added that, “The combined production cuts were more aggressive than we expected.”
South America is a major soybean exporter and competes with the U.S. for business on the global market. A downbeat crop outlook there could increase demand for U.S. supplies.
Soybean futures have rallied almost 11% since the beginning of February, as market sentiment has been dominated by concerns over distressed crops in major South American soy growers and on hopes demand from top consumer China will remain robust in the near-term.
But some market participants were reluctant to push prices higher after the USDA warned that rising prices will cool global export demand.
The agency said that it expected soybean prices to average USD11.40 to USD12.60 a bushel, up USD0.30 from a month ago.
Some market analysts expect soybean prices to remain stalled for the rest of the month until the USDA releases its projections for how many acres farmers will plant with the crop on March 30.
Elsewhere on the Chicago Mercantile Exchange, wheat for May delivery dipped 0.1% to trade at USD6.4188 a bushel, while corn for May delivery added 0.25% to trade at USD6.4688 a bushel.
Forexpros
