Soybean prices fell
January soybean futures contracts, trading on the CBOT (Chicago Board of Trade), fell by 0.67% and settled at $8.85 per bushel on December 22, 2015. Soybean futures prices fell due to the dry weather conditions in Brazil. Following the CBOT, ETFs like the Teucrium Soybean Fund (SOYB) fell by 0.28% on December 22, 2015.
The weather in Mato Grosso—Brazil’s top soybean producing state—concerned traders. On December 21, the precipitation supported the moisture requirement in the northeast region. Dry weather conditions aren’t that acute. This could hurt soybean plants’ progress. Some precipitation is projected for the week ending on December 27, 2015. This could support the soybean plants in the near term. The dry conditions in Brazil are severe for the northern regions. Mato Grosso is in the central region. The dry spell in the northern regions might not have a negative impact on yields for the major soybean producing states. There was a favorable forecast on December 22, 2015. The export competition cues were higher than projected from Brazil. This was negative for the US soybean export prospects. It dragged the prices down on December 22, 2015.
Argentina’s soybean supply might not receive the projected exports after the export policy change. The Argentinian peso hasn’t stabilized since the government lifted the restrictions. Before stability is achieved in the local currency, Argentinian exporters aren’t willing to take any chances where they have to face a considerable loss in export transactions. However, analysts think that there will be fewer opportunities, like the threat of unfavorable weather conditions from Brazil, that could help Argentina’s soybean exporters.
Concerned fertilizer companies
The fall in soybean prices would have a negative impact on farmers’ income. It would negatively impact fertilizer companies’ sales. However, with the fall in soybean prices on December 22, 2015, businesses like Martin Midstream Partners (MMLP), CVR Partners (UAN), Chemical & Mining Co. of Chile (SQM), and Enterprise Products Partners (EPD) benefited. The companies’ shares rose by 7.90%, 3.9%, 2.8%, and 1.9% on December 22, 2015. ETFs like the Material Select Sector SPDR ETF (XLB) rose by 1.3% on December 22, 2015.