Chicago soybean futures inched up on Wednesday, but remained below last week’s five-month high, as data showed that bean processing had slowed in the U.S. and the crop agency of top exporter Brazil raised its harvest forecast.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.2% at $12.17 a bushel, while CBOT wheat rose 0.8% to $6.78 a bushel and corn gained 0.4% to $4.69-1/4 a bushel.
Brazil’s Conab revised its forecast for the country’s 2023/24 soybean harvest by 1.16 million metric tons to 147.685 million tons, despite flooding in Rio Grande do Sul, the second largest soy producing state. Cheap Brazilian supply continues to out-compete U.S. beans, putting downward pressure on Chicago futures prices.
Analysts note that traders will be focused in the coming weeks on whether the large acreage planted in Brazil will make up for crops lost in the floods. Additionally, the potential for a ceasefire in the Middle East could see oil prices come under pressure, which could flow through to oilseed pricing.
Meanwhile, U.S. soybean processing slowed in April from a record crush in March due to narrowing margins and seasonal downtime at processing plants. The Biden administration’s announcement of tariff increases on an array of Chinese imports, but not on Chinese used cooking oil, also disappointed traders who had bid up prices on rumors of the latter being included.
In wheat markets, Russia’s nominee for agriculture minister said the country had lost crops sown on roughly 500,000 hectares this year due to bad weather, but that Russia has sufficient resources to replant them. This has contributed to the 0.8% rise in CBOT wheat futures.
Overall, the market remains focused on the interplay between improved supply outlooks, particularly from Brazil, and weather-related concerns in other major producing regions, as well as the broader economic and geopolitical factors influencing commodity prices.