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CBoT Soybean Lowers On Better Crop Prospects, China Demand Concerns

23 May 2020 8:18 am
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Mumbai (Commodities Control) – U.S. soybean futures weakened to a one-month low on Friday on forecasts for good weather for crop development in the U.S. Midwest.

U.S. soybean production for 2020/21 is projected at 4.125 billion bushels, up 568 million from last year’s crop. The increase is largely based on farmers following through on intentions to plant 83.5 million acres of soybeans, although the projected trend yield of 49.8 bushels per acre is also above last year’s level.

It would be a sharp increase from the 76.1 million acres sown in 2019/20. Soybean planting this spring is advancing well in some Midwestern areas, with 38 percent of intended U.S. acreage sown by May 10.

The benchmark CBOT July soybean futures contract closed above its session lows after finding support at the low end of its 20-day Bollinger range. Jul 20 Soybeans closed at $8.33 1/4, down 1 3/4 cents.

August Soybeans closed at $8.36 1/2, down 2 cents. September Soybeans closed at $8.38 1/2, down 1 1/2 cents and November Soybeans closed at $8.44 1/2, down 1 cent.

Soymeal futures firmed on end-of-week bargain buying after sinking to their lowest level since April 2016. July Soybean Meal closed at $284.10, up $1.60.

Soyoil futures were lower, weighed down by declines in the crude oil market. CBOT July soyoil found support at its 50-day moving average. July Soybean Oil closed at $26.64, down $0.47.

Soybean markets also sagged on concerns about export demand, with sales to China in focus after Beijing announced new national security legislation for Hong Kong after last year's pro-democracy unrest. U.S. President Donald Trump warned that Washington would react "very strongly" against attempts to further restrict the former British colony.

Traders also noted some position-squaring ahead of the U.S. Memorial Day holiday. Grain markets will be closed on Monday.

For the week, the most-active soybean futures contract was down 0.6%. Soymeal was 1.2% lower this week and soyoil was up 0.3%.

Argentina soybean processors crushed a low 3.66 MMT of beans in April due to coronavirus issues.

The Commitment of Traders report showed that soybean speculative traders net long fell 20,401 contracts to 12,064. Managed money closed 6.7% of their longs wk/wk and opened 14,093 new shorts.

Commodity funds were net sellers of Chicago Board of Trade soyoil and soybean futures contracts on Friday. They were net buyers of soymeal.

Support and Resistance for active contract lies at $8.22 and $8.44 per bushel, respectively.

(Commodities Control Bureau)

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