Soybean futures finally gave us a little action this month. Poor weather conditions in the Midwest followed by the ongoing concerns between global supply and demand gave traders some market movement.
According to U.S. data, forecasts are predicting an increase in ending stocks. This is mainly due to lower domestic needs and higher crop yields. Supply continues to remain tight. Dryer conditions across the majority of Midwest created volatile conditions leading to price increases in the futures. Precipitation levels that have been monitored closely by analysts, show that lower production output is a real concern and could tighten the global supply-demand balance sheet.
Internationally, Argentina's drought issues that have been an issue for months has definitely impacted soybean yields. South American export volumes are also being monitored and will add to this equation longer-term. Brazil on the other hand, saw a record-high in their soybean crops. This region is attempting to balance the global supply on it's own.
Soybean oil is also seeing a rise in prices. Following soybean futures, demand for renewable diesel remained high and increased the demand for soybean oil.
Supply and demand should continue to control the soybean market and complex. Between uncertain weather conditions and production issues globally, prices may finally be getting a boost higher. So investors should continue to monitor short-term weather premium and longer-term demand concerns.
Disclaimer: Past performance is not indicative of future returns. Opinions are my own. Profitable trades are not guaranteed.
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