Soybeans Sink as Traders Grow Weary of Trade Fight
Soybeans for November delivery fell 1.6% to $8.61 1/2 a bushel on the Chicago Board of Trade on Thursday. Traders were reluctant to buy into any newfound positivity from a tentative meeting between U.S. and Chinese delegations in October. Wheat for December delivery rose 1.2% to $4.66 1/4 a bushel. Corn for December delivery rose 0.1% to $3.58 3/4 a bushel.
A lack of a suitable alternative for China as the main purchaser of U.S. soybeans while inventories of soybeans in the U.S. continue to be large is applying pressure to soybean prices.
"The bottom line for soybeans is that we have a balance that is huge," said Don Roose of U.S. Commodities.
Weather continues to look bearish for soybean futures, mitigating the effects of late planting of U.S. soybeans this spring, he said.
Sugar, Cereal Markets Pushed Global Food Prices Down in August
Global food prices fell for a third consecutive month in August, the Food and Agricultural Organization of the United Nations said Thursday, driven by sharp declines in sugar and cereal markets.
The FAO's index of food prices fell 1.1% from July to 169.8 in August, but remained 1.1% higher than it did in August 2018.
Cereal prices slumped 6.4% from July and were down 6.6% from August last year, the FAO said, as large supplies of wheat raised the level of competition between major exporters. Corn prices also dropped because of forecasts that the U.S. crop would be larger than many traders had anticipated, after unprecedented delays to planting during the wet spring.
Brazil Set to Overtake US as Biggest Soybean Producer -- Market Talk
11:05 ET - Brazilian farmers will grow 121.4M metric tons of soybeans in the 2019-2020 growing season, enough to push it past the US as the world's biggest producer of the oilseeds, according to INTL FCStone analyst Ana Luiza Lodi. The 5.5% rise over the 2018-2019 crop will be partly because of an increase of 1.6% in the area planted, Lodi says. Part of the increase in area is coming mostly from fields formerly used as pasture being planted with soybeans, and part is coming from farmers switching from sugar cane or rice to soybeans, according to the analyst. The amount exported will depend on whether or not the US and China reach a trade agreement, Lodi says. (email@example.com)
STORIES OF INTEREST:
Ethanol Stats Bearish as Inventory Builds -- Market Talk
12:22 ET - Ethanol inventory has built to 23.8M barrels, according to the EIA's latest report--the highest in roughly one month. Production was down, dropping 25,000 barrels to 1M. Corn futures are at historical lows, with Don Roose of US Commodities calling the prices among some of the lowest in history. However, corn is up despite disappointing sales results from the report, as the low price for corn doesn't appear to be incentivizing traders to purchase things like lower rent. Corn futures have been closely tied to ethanol futures, which have been on the decline themselves. (firstname.lastname@example.org; @kirkmaltais)
FCStone Grain Yield Predictions Close to USDA Figures -- Market Talk
09:45 ET - Estimates of corn and soybean yields for 2019/20 by INTL FCStone are close to figures released by the USDA last month--providing an independent confirmation of what were initially controversial predictions by the government agency. INTL FCStone estimates that the US corn yield will be 168.4 bushels per acre and soybean yields will be 48.3 bpa. Both figures are only down slightly from those posted by the USDA last month--at 169.5 bpa and 48.5 bpa, respectively--suggesting that further analysis vindicates the USDA. Other independent surveys mark yields down further, with Pro Farmer last month placing corn yields at 163.3 bpa and soybeans at 46.1 bpa. (email@example.com; @kirkmaltais)
Tyson Invests in Plant-Based Shrimp Maker -- Market Talk
08:48 ET - Tyson Foods dips further into vegan-friendly meat alternatives, as its venture capital unit invests in New Wave Foods, a San Francisco-based developer of plant-based shellfish replacements. The startup's initial product is a shrimp alternative made from seaweed and plant-derived proteins, which New Wave aims to introduce to restaurants in early 2020. Terms of the deal weren't disclosed. Meat giant Tyson, a previous investor in pea protein-based burger maker Beyond Meat, last month began rolling out its own line of plant-based nuggets. (firstname.lastname@example.org; @jacobbunge)
Livestock Drops to Close Thursday -- Market Talk
15:12 ET - Livestock futures on the CME finish lower with hog and cattle futures both down 1.2% to 66.3 cents per pound and 97.875 cents per pound, respectively. Cattle hit its lowest level since April 2018 intraday, with the contract falling to a low of 97.175 cents per pound. Cattle has fallen 9% in the past 30 days, with demand for cattle flagging. (email@example.com; @kirkmaltais)