Commodity Blog

Commodity Prices – Soybean

Corn and soybeans fell on forecast that rains may alleviate drought in South America. Global Weather Monitoring predicted that about 90 percent of areas planted with soybeans in Argentina and Brazil will get as much as 3 inches (7.6 centimeters) of rainfall. Previously, the region suffered from drought, therefore the forecast increases prospects for output.

Returning worries about the debt crisis in the European Union also hurt the commodities. European leaders were meeting yesterday at summit in Brussels. Investors are concerned that previously planned measures won’t be enough to contain spread of the problems across the eurozone.

Corn traded near $6.3200 per bushel today as of 00:43 GMT on CBoT, following the slump from $6.3925 to $6.3200 yesterday. Soybeans traded at $11.8900 per bushel today after falling from $12.1425 to $11.8525.

Soybeans and rubber declined today as macroeconomic data from the United States showed decreasing number of new home sales and increasing number of unemployment claims. Claims for unemployment benefits rose from 356,000 to 377,000 last week. New homes sales were at a seasonally adjusted rate of 307,000 in December, compared to the median forecast of 321,000 and the November value of 314,000.

Yesterday, soybeans advanced as the pledge of the US Federal Reserve to keep interest rate record low till 2014 was supporting commodities. The Standard & Poor’s GSCI Spot Index of 24 commodities added 1.5 percent yesterday.

Futures for delivery of rubber in July went down to 316.4 yen per kilogram ($4,087 per metric ton) before trading at 317.3 yen on the Tokyo Commodity Exchange. Soybeans fell from $12.2175 to $12.1825 per bushel as of 6:31 GMT on CBoT after reaching the highest price since January 3 of $12.3500 yesterday.

Commodities advanced today as German economic confidence improved, while China’s economic growth slowed, spurring speculation about stimulus. Oil, corn and soybeans were among gainers.

China’s gross domestic product increased 8.9 percent in the fourth quarter of 2011, following the 9.1 percent expansion in the third quarter. That was the slowest growth in 10 quarters. The report fueled talks that the country will perform measures to stimulate economic growth.

ZEW Economic Sentiment for Germany increased from -53.8 to -56.1 (month-on-month) in January, the highest level since July 2011. Economic expectations for the eurozone improved to -32.5 this month from -54.1 in the month before.

Standard & Poor’s downgraded credit ratings of several European countries on January 13. Markets were downbeat somewhat after the action, but quickly recovered as such move was expected and generally priced in.

February futures for delivery of crude oil advanced $2.01 (2 percent) to $100.71 per barrel on NYMEX. Brent oil rose from $111.42 to $111.57 per barrel as of 23:54 GMT today on ICE. Corn price was higher from $6.0125 to $6.0600 per bushel on CBoT today, while soybeans rallied from $11.6300 to $11.8275 per bushel.

Corn and wheat dropped today after the US Department of Agriculture predicted that global stockpiles will grow. Soybeans also declined. The USDA projected that world wheat inventories will increase by 1.5 million metric tons to 210.0 million in the 2011–12 season, global corn stockpiles will grow 1.0 million tons to 128.1 million tons and soybean ending stocks are projected to be higher by 45 million at 275 million bushels.

Earlier, the agricultural commodities were rising as adverse weather posed threat to crops in South America. Nevertheless, the estimates of the USDA showed that lower supply from the region will be mostly offset by production in other parts of the world.

Wheat slipped from $6.4125 to $6.0500 per bushel as of 23:47 GMT today on CBoT. Corn tumbled from $6.5125 to $6.1150 per bushel, while soybeans fell from $11.9775 to $11.7350 per bushel today.

Corn and soybeans were rising today on concerns that bad weather in South America may hurt crops. Later the agricultural commodities reversed its trend. Corn closed above the opening price, while soybeans ended session with losses.

The continuing drought in Brazil and Argentina is worse than forecasters previously estimated and yield may be lower than was anticipated. The US Department of Agriculture predicted that Argentina will harvest 29 million metric tons of corn and 52 million tons of soybeans.

The problems in the European Union reduced demands for commodities, including corn and soybeans. A report of the European Commission showed that the economic sentiment in the eurozone declined.

Corn closed at $6.4350 per bushel on CBoT today after opening at $6.4200 and climbing to $6.4950. Soybeans fell from $11.9800 per bushel to close at $11.8852, following the advance to $12.0900.

Corn and soybeans gained on the concerns about the adverse weather in Argentina and Brazil. Forecasters said that hot, dry weather may hurt crops in the South African countries. Corn climbed from $5.7825 to close at $5.8275 per bushel on CBoT. Soybeans advanced from $11.1225 to $11.2975 per bushel.

Coffee fell as inventories grew. ICE-monitored stockpiles rose for the fifth consecutive week and have increased 20 percent since November 1. The prices may still rebound as the forecast of the US Department of Agriculture showed that the balance of supply and demand may result in deficit. Coffee prices declined from $2.1340 to $2.1095 per pound on ICE.

Commodities, including copper and oil, gained today on good news from Europe and the United States. The European politicians discussed on today’s summit ways to resolve the region’s debt problems and announced a range of measures, including leverage for the temporary bailout fund and an implementation of more permanent stability mechanism next year. The US consumer confidence improved this month, according to the preliminary estimate of the University of Michigan.

Agricultural commodities, specifically corn, soybeans and wheat, haven’t joined the rally as the US Department of Agriculture boosted its forecast for the next year’s inventories. The outlook for the global stockpiles of corn was 4.6 percent higher than in the previous estimate, for soybeans 1.5 percent higher and for wheat 2.9 percent above the previous forecast.

January futures for delivery of crude oil advanced $1.07 to $99.41 per barrel on NYMEX, while Brent jumped from $107.78 to $108.68 per barrel today as of 21:48 GMT on ICE. Copper rallied from $3.4720 to $3.5560 per pound on COMEX. Corn fell from $5.8900 to $5.8500 per bushel, soybeans slumped from $11.3100 to $11.0575 and wheat traded near its opening price of $5.7675 after falling to $5.6775 today on CBoT.

Corn and soybeans gained today on the speculation that the recent slump of the price will spur demand from makers of food and fuel. Prices for cattle and hogs jumped this year, potentially prompting farmers to increase their herds and to buy more animal feed as a result. The drought in Argentina can reduce supply, further boosting the agricultural commodity. On the other hand, forecasters say that the drought in Brazil may soon end and that can reduce the impact of lower supply from Argentina.

Corn was up from $5.8000 to $5.8575 per bushel on CBoT today, following the intraday drop to $5.7000 per bushel. Soybean price advanced from $11.2550 to $11.3000 per bushel today after falling earlier to $11.2025 per bushel.

Wheat was a different story as it declined on the forecast that the demand will decrease, while stockpiles will grow, yet the crop was also trying to erase its losses by the end of the trading session. Economists expect China to reduce its wheat import as the nation’s economy is slowing. Market forecasters predict that the report of the US Department of Agriculture on December 9 will show that the global wheat inventories rose 202.89 million tons, compared to the November estimate of 202.6 million tons.

Wheat closed at $5.9775 per bushel on CBoT down from the opening price of $6.0050, but significantly above the daily low of $5.8825.

The developments in the global economy continue to put downward pressure on commodities. As a result, soybeans touched the lowest level in 13 months today, while iron ore is expected to follow other commodities in decline.

The members of the US congressional debt-reducing supercommittee failed to reach agreement about budget cuts. Germany’s Finance Ministry admitted that the country’s economic growth became “noticeably slower”.

China may increase its imports of soybeans, supporting prices, but for now the negative fundamentals have upper hand. As for iron ore, even China isn’t going to support the commodity as demand in the Asian nation wanes.

Soybean settlement was at $11.5025 per bushel as of 9:24 GMT today on CBoT after falling yesterday from $11.7100 to $11.4575 per bushel and touching today $11.4100 per bushel — the lowest level since October 8, 2010.

Spot price for ore climbed to $147.40 per metric ton yesterday. Prices were up 24 percent this month, while ore dropped 31 percent in October and analysts predict it’ll resume its decline next month.

Sugar declined on forecasts of good harvest. At the same time, expectations for soybean yield more pessimistic, causing the crop to gain.

Sugar was down on the signs of advancing output from Ukraine. Ukraine’s harvest of sugar beet was almost 29 percent larger than in the previous year as of November 1, according to the government report. The US Department of Agriculture estimated that Ukraine’s sugar exports will double in the 2011–12 season.

The USDA projections for soybeans, on the other hand, were more pessimistic. The USDA predicted that production in the USA will decline 8.5 percent to 82.9 million metric tons this year. The reason for the declining output is dry weather in parts of the United States.

March futures for delivery of raw sugar declined 1.6 percent to $0.2499 per pound by 8:21 on ICE. The weekly decline was 2.3 percent, while prices were down 22 percent over this year. Futures for delivery of soybeans in January advanced 0.7 percent to $11.755 per bushel as of 13:15 on CBoT.