Weather woes boot soybean prices

Weather woes boot soybean prices
Jan 25, 2019

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A lack of moisture could spell lower yields in South America, a commodity strategist said

By Diego Flammini
Staff Writer
Farms.com

Soybean prices have trended upwards recently because of weather issues in key South American regions.

Commodity markets opened yesterday with soybeans trading at about US$9.16/bushel. That price is up from US$9.09/bu. on Tuesday and US$8.94/bu. on Jan. 16.

A lack of moisture in parts of South America is the primary reason for the price rally, said Moe Agostino, chief commodity strategist with Farms.com Risk Management.

“The Brazilian soybean harvest is around 6 percent complete but, so far, that early harvest is reporting some disappointing yields,” he told Farms.com. “They’ve had basically no rain for two months and are up to 15 inches short of normal precipitation.

“I would expect that production would come in lower for at least the next 30 days because it doesn’t look like the weather is going to bring much relief.”

Farmers are now debating between selling stored crops while the prices are up or waiting for another potential rally.

Each grower tends to follow his or her own marketing strategy, said Belinda Burrier, a soybean producer from Union Bridge, Md.

“We have a target price that we’re looking for and it hasn’t quite reached there yet so we’re still on hold,” she told Farms.com. “Selling or waiting depends on your individual situation. I know some producers that just take the price the market gives them.”

Waiting just over a month before making any marketing decisions could also be a good strategy, Agostino said.

China and the U.S. have set a deadline of March 1 to reach a trade agreement or else President Trump will impose new tariffs on China.

If the two countries can reach a deal by that date, markets could react bullishly, Agostino said.

“If the two countries can reach some sort of agreement, it would be good for the two largest global economies and would be price supportive for farm commodities.”

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