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Soybean Futures Reach Monthly High

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Soybean prices rise

November CBOT, or Chicago Board of Trade, soybean futures prices rose 2.45% and settled at $8.89 per bushel on September 25, 2015. Soybean prices rose on the third consecutive day due to a speculative buying increase on a favorable crop progress report expectation from the USDA (US Department of Agriculture) and early completion of the harvest with less damage than expected. ETFs such as Teucrium Soybean Fund (SOYB) followed soybean futures prices on CBOT and rose 2.56% on September 25, 2015.

 

2015 harvest

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With favorable harvest conditions, it is expected that the harvest might be over by the end of October. When the end of harvest is just around the corner, low sales volume is expected as producers wait for a price hike. Therefore, during the commercial harvest, volumes of soybean might be lower. For now, speculative volumes might flourish at low prices for soybean futures.

On September 25, 2015, the settlement price of November CBOT soybean contracts rose to a monthly high. This rise might provide a boost to soybean futures prices, as it happened before the harvest progress report for the week ending September 27, 2015. A week full of favorable weather conditions is expected to generate positive results from the USDA for harvest progress, which was at 20% completion at the end of the week. As the weather remains favorable, early harvest expectations might come to fruition.

Soybean prices are more than $0.60 per bushel lower than prices during last year’s harvest. Farmers would need to supply more soybean new crop to meet cash needs. The soybean market might see sudden moves in price and volumes. With the Chinese delegation’s contract, market sentiment has changed to “feel good,” while the lower rates could push producers to increase supply to satisfy their cash needs. During October, prices might take another dive as supply might increase unexpectedly.

Impact on related businesses

Agricultural and related companies such as Chemical & Mining Co. of Chile Inc. (SQM), Syngenta (SYT), CVR Partners (UAN), and Agrium (AGU) would benefit from an increase in soybean prices, which might motivate farmers to boost their income. VanEck Vectors Agribusiness ETF (MOO) has an interest in these stocks and rose 0.28% on September 25, 2015.

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