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Corn+Soybean Digest

Watch global impact on soybean prices

The Chinese New Year doesn’t bring much to cheer about in the soybean market. Neither does good weather that’s boosting crop projections in South American bean regions. These “good times” across the world are among forces that have helped push new-crop November 2014 soybean futures below $11 per bushel.

International events impact U.S. soybean prices virtually every day. Whether it’s a major world holiday that steals traders’ attention, Brazil or Argentina rainfall or a health scare that can discourage eating of meat raised on soybean meal, worldwide actions can affect bean prices. 

“We’re moving into that time span where we’re watching South American weather to get an idea of their soybean yields,” says Lisa Elliott, South Dakota State University commodity marketing specialist. “They’re expecting record crops this year.

“Even though we’re seeing good export sales, a lot of analysts think there could be some cancellations of U.S. soybean sales as South America starts to get beans out for export.”

Brugler Marketing and Management reports Brazilian producers appear to be active sellers on the rally of old-crop March bean futures (which were in the $12.75 range on Friday), with those cash sales being hedged in Chicago. U.S. export sales commitments are already 104% of the WASDE forecast for the year, Brugler says, with 1.11 billion bushels already shipped. The agrimarketing company adds that demand from China is expected to slip the coming week due to the Lunar New Year Holiday.

Further negative news comes from Farm Futures, a Corn+Soybean Digest sister publication, which notes that Bird Flu could again hurt the flight of soybean prices. “The Chinese Center for Disease Control and Prevention as of (last) Monday has reported 96 human infection cases of the Bird Flu virus H7N9,” Farm Futures reports. “There are concerns that the demand in China for poultry products could drop over the next few months if the flu spreads. This could also lead to a drop in soybean meal demand in China.”

“Activities in other parts of the world are important to the 2014 U.S. soybean crop,” Elliott says. “We don’t have a lot of carryover going into the next year. We expect more soybeans acres in the U.S., but there’s still a question as to how many soybean acres will be planted.

“The USDA outlook conference in February will provide more information, as well as the March prospective plantings survey. Good risk management by farmers will be important, no matter which direction planted acres or prices go.”

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