Lowest Prices in Years
New harvest soybean prices in the US have dropped to their lowest level since late 2020, reaching $406 per ton. Favorable weather conditions in the spring and June have improved the US soybean crop’s condition, exerting pressure on new-crop soybean quotes.
Market Reactions and Price Declines
On the Chicago exchange yesterday, July soybean futures fell by 0.9% to $423.4 per ton, marking a 6.7% decline for the month. November futures decreased by 0.2% to $405.9 per ton, a 9.5% drop for the month.
High Stock and Planting Area Estimates
Analysts’ expectations of higher US soybean stocks and planted area in today’s USDA reports are contributing to the price drop. According to the average estimate by Barchart, US soybean stocks will reach 26.18 million tons, exceeding last year’s figure by 4.52 million tons. The sowing area is expected to hit 86.753 million acres, surpassing the USDA’s March forecast by 243,000 acres.
Global Soybean Production Forecast
Experts from the International Grains Council (IGC) have increased their forecast for global soybean production in the 2024/25 marketing year by 1 million tons to 415 million tons. This figure is 23 million tons higher than the 2023/24 marketing year. Consequently, the estimate of global reserves has been raised by 1 million tons to 79 million tons, 11 million tons above the current season’s figure.
Canadian Planting Trends
Statistics Canada predicts that 5.74 million acres of soybeans will be planted in the country in 2024, a 2% increase from the previous year. Conversely, the area planted with canola is expected to decrease by 0.3% to 22 million acres, despite earlier estimates of 21.4 million acres.
The significant drop in US soybean prices reflects a combination of favorable weather conditions, higher stock estimates, and increased planting areas. As global production forecasts rise and stock levels grow, stakeholders should stay informed about market trends and USDA reports to navigate this dynamic landscape effectively.