Soybeans at 4-year lows amid supply glut, strong dollar
CANBERRA, Dec 19 (Reuters) -Chicago soybean futures on Thursday sat at their lowest since September 2020, pinned down by a strong dollar, a slide in soyoil prices and expectations of massive production early next year in top exporter Brazil.
Corn and wheat futures eased, tracking the fall in soybeans.
FUNDAMENTALS
* The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 slid 0.2% to $9.50 a bushel at 0131 GMT, matching last session's low. Prices fell 2.6% on Wednesday.
* CBOT corn Cv1 slipped 0.1% to $4.36-3/4 a bushel and wheat Wv1 fell 0.5% to $5.38-1/2 a bushel. Both contracts are moving towards four-year lows reached earlier this year, though corn has further to go than wheat.
* The U.S. dollar .DXY shot to its strongest since November 2022 against a basket of currencies after the Federal Reserve on Wednesday signalled a slower pace of rate cuts in 2025.
* A stronger dollar makes greenback-priced U.S. crops less competitive in global markets, pressuring CBOT prices.
* Production expectations in Brazil have risen following regular rainfall. This week AgRural predicted a record 2024-25 crop of 171.5 million metric tons and another consultancy, Patria Agronegocios, forecast a 170.41 million ton harvest.
* The Brazilian real BRL= weakened by around 30% against the dollar this year, helping Brazil's exporters undercut U.S. rivals.
* CBOT soyoil futures BOc1 plunged this week after news on Tuesday said a stopgap U.S. government funding bill did not include support for biodiesel among other agriculture-related policies and spending.
* "Edible oil prices and meal prices are both falling, with soybean prices following, providing a drag on corn and wheat prices that are trying to hold areas of chart support," StoneX analyst Arlan Suderman said.
MARKETS NEWS
* Asian stocks slid, bond yields rose and the dollar was perched near a two-year high on Thursday after the Fed cautioned it would ease the pace of rate cuts in 2025 and investors braced for a Bank of Japan policy decision. MKTS/GLOB
Reporting by Peter Hobson; Editing by Sumana Nandy
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
