The week kicked off with high volatility in the soybean market, as Monday's session (29th) on the Chicago Board of Trade (CBOT) ended with losses ranging from 9 to 22.75 points across major contracts. The steepest declines were observed in the nearby contracts, with the market trading in the red throughout the day and losing over 30 points during intraday activities. By the close of the session, August soybeans settled at $10.54 per bushel, while November finished at $10.39.
Soybean prices are currently reflecting a mix of both new and familiar market influences, with all factors contributing to downward pressure on prices.
Among the known variables are the promising crop outlooks and sluggish demand in the United States.
"The American weather continues to be quite reasonable," analysts report. "There is a heat wave, but it won't get too hot in the Midwest. The weather is fairly divided, with the Plains up to Canada experiencing warmer and drier conditions, while the Midwest remains cooler with rains.
In essence, production is expected to be substantial, and as we move into August, there's nothing significantly different. What isn't happening are the sales. In other words, nothing has changed, and the US still faces significant challenges since it's not discounting the basis at American ports to attract demand and compete with Brazil, and the situation remains stagnant."
Additionally, market attention is focused on Argentina's soybean export tax, known as "retenciones," which continues to be a critical factor for international traders. Changes in Argentina's tax policies could alter global soybean flows, further impacting US exports.
In summary, the combination of robust crop expectations, tepid demand, and geopolitical factors are keeping soybean prices under pressure, forcing traders to remain cautious in the coming weeks.
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