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CBoT Soybeans Recover As Argentina Halts Export Registrations, Eyes On Export Data

27 Feb 2020 7:58 am
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Mumbai (Commodities Control) – U.S. soybean futures on Wednesday extended a rebound from a sharp drop earlier this week as investors anticipated changes to Argentine export taxes that could reduce export competition from the major soy supplier.

Chicago Board of Trade (CBOT) May soybean futures rose 3 ¾ cents to end at $8.92 a bushel in a second day of gains following the contract's drop on Monday to a nine-month low. July contract closed at $9.02 ¾, up 3 cents and August Soybean settled at $9.07, up 3 ¼ cents.

March Soybean Meal closed at $291.30, up $4.80, while May soymeal futures added $5.30 to $298.30 per ton, the contract's steepest rise in nearly four months. March Soybean Oil closed at $29.07, down $0.16.

Soybean and soymeal futures bounced at midmorning on news that Argentina's Ministry of Agriculture suspended the registration of agricultural exports until further notice. The move was seen as foreshadowing a jump in grain export tariffs under the country's new Peronist government.

"The Argentine news was supportive for soymeal and beans," said Terry Reilly, senior commodities analyst. "It shifts the (export) flows of beans and especially meal to the United States." Soybeans, however, remain anchored by export competition from top supplier Brazil, whose likely record-large harvest is priced well below U.S. exports.

The virus has infected about 80,000 people worldwide and killed more than 2,700, mostly in China. Cases have increased outside of China this week, including in major grain importers Japan and South Korea.

Severe disruption to economic activity in China, where the virus first developed, has already dampened hopes for increased Chinese imports of U.S. agricultural goods – as called for under a "Phase 1" trade agreement between Washington and Beijing.

The risk of a wider impact on demand was adding to concern on grain markets, although steady short-term buying by importers was helping underpin prices. "Demand is raising questions, with an economic impact possibly strong on global growth," consultancy Agritel said.

Meanwhile market awaits export-sales data on Thursday where the analysts estimate for soybean bookings to be in between 600k and 900k MT. Soybean meal sales are expected to be between 150k and 350 MT, with bean oil bookings between 8,000 and 45,000 MT. World veg oil prices have been declining, putting pressure on crush margins.

Commodity funds were net buyers of Chicago Board of Trade soybean and soymeal futures contracts on Wednesday and net sellers of soyoil, traders said.

Support and Resistance for the active contract lies at $8.78 and $9.06/Bushels, respectively.

(Commodities Control Bureau)

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