CBOT Soybean Prices Decline Amid Predictions of Rainfall in Brazil

Chicago Board of Trade (CBOT) soybean futures concluded on a lower note last Friday, experiencing a slight decline for the week. Investor attention centered around the potential relief provided by much-anticipated rains in Brazil, where an ongoing drought has disrupted plantings and impacted crops.

The outlook for showers and a reduction in heat in northern Brazil raised hopes for improved crop conditions in the world's leading soybean exporting nation.

CBOT January soybeans (SF24) settled down by 17-3/4 cents, concluding at $13.25 per bushel. The week ended with January soybeans down by 0.4%. Additionally, CBOT January soyoil (BOF24) fell 0.81 cent to close at 51.45 cents per lb, recording a 2.3% gain for the week. Meanwhile, CBOT January soymeal (SMF24) finished $11.30 lower at $412.70 per short ton, marking a nearly 5% decline for the week. January soymeal reached its lowest closing point since October 23, when it finished at $411.30.

Consultancy firm Patria Agronegocios projected that Brazil's soybean production would amount to 150.67 million metric tons, a decrease from the previous season's 154.10 million. The reduction is attributed to drought conditions in key producing states, marking the first projection predicting an annual decline.

Commodity brokerage StoneX adjusted its forecast for Brazil's 2023/24 crop to 161.9 million tons, down from the previous estimate of 165.03 million tons.

The USDA confirmed private sales of 132,000 metric tons of U.S. soybeans to China, along with an additional 198,000 tons to unknown destinations. These transactions are slated for delivery in the 2023/24 marketing year that commenced on September 1.

In Argentina, the primary global exporter of soy oil and meal, farm exports generated around $1 billion in November. However, this marked a 41% decline compared to the same month in the previous year. The drop is attributed to a severe drought impacting shipments and farmers refraining from selling amid political uncertainties.

Soybean basis bids in the U.S. Midwest remained steady to stronger, driven by robust demand from soy processors and elevators, which outpaced farmer offerings.

CBOT soybean futures experienced a decline, influenced by market dynamics surrounding weather forecasts in Brazil. The prospect of rain alleviating drought conditions in key growing areas contributed to the downward trend. Additionally, projections for reduced soybean production in Brazil further impacted market sentiment. The confirmation of U.S. soybean sales and the challenges faced by Argentina in farm exports due to drought and political uncertainties added complexity to the soybean market landscape. The steady to stronger soybean basis bids in the U.S. Midwest underscored ongoing demand dynamics within the domestic market.