Soybean prices rebounded Thursday from Wednesday’s sell-off that was triggered by a bearish USDA report.
USDA’s November World Agricultural Supply and Demand Estimates report rushed in with record crop production estimates, triggering a plunge in prices. USDA estimated record corn and soybean yields of 175.3 bu. per acre and 52.5 bu. per acre, respectively. A recent report by the International Grains Council predicated a record world grain supply for 2016/17.
Some analysts say bargain hunting subsequently pushed up soybean futures Thursday.
November soybeans climbed 7 cents to close at $9.89 in choppy trading, after dropping nearly 20 cents on Wednesday. December corn climbed 2 3/4 cents, while December wheat slid 2 1/5 cents to $4.04 2/5.
“Some bargain hunters came in with the dip ]in soybean prices],” says DuWayne Bosse, of Bolt Marketing in Britton, S.D. “It’s tied back to money flow and has a lot to do with day-to-day moves."
Speculative funds are more likely to put their money into soybeans, he says.
USDA reported Thursday that weekly inspected soybean exports dropped 12% to 2.6 MMT. Corn exports rose slightly, by almost 11 MT to 889,609 MT total. Wheat exports jumped 47% to 494,154 MT.
The dip in exports at this time of year follows a familiar pattern, according to Bosse.
“China is smart," he says. "They will see the size of our crop and say, ‘We don’t have to buy as much, and if we pull back, the price will drop, and then we can buy more.’”
The unexpected election of Donald J. Trump for president has had little impact on markets, analysts say, despite some reports, such as one by Goldman Sachs, that indicate his trade policies could hold down ag exports. The market not only taking the election into account, but also looking at other factors, according to analysts.
“No one person dictates everything that much,” says Bosse.
Mike North, president of Commodity Risk Management Group in Platteville, Wis., agrees.
“Trump's election has done little to motivate grain markets,” he says. “However, yesterday's ‘risk-on’ attitude in stock markets, a late session bounce off of recent chart support, and higher priced trade in Malaysian palm oil helped excite overnight trade levels on typical volume."
“Look for more technical trading around the $10 threshold, with little short-term direction,” North says.