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Strong Chinese Customs Import Data Support Soybean Demand

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Soybean prices rise

Soybean futures contracts on the CBOT (Chicago Board of Trade), for January expiry, rose by 0.93% and settled at $8.99 per bushel on January 13, 2016. Soybean futures prices rose due to stronger demand sentiment from the world’s biggest soybean importer—China. Following the price movement on the CBOT, the Teucrium Soybean Fund (SOYB) rose by 0.25% on January 13, 2016.

China’s customs data for imports in December 2015 released on January 13, 2016. The soybean imports from China—9.1 million metric tons during December 2015—were 6.9% higher YoY (year-over-year). Soybean imports from calendar 2015 were 81.7 million metric tons—14.4% up from calendar 2014. Strong imports from the biggest soybean importer supported the soybean export demand and kept futures prices high on January 13, 2016.

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Brazilian Farm Group IMEA announced that 30% of the soybean crop in the key producing state Mato Grosso was in poor to very poor conditions. Amid the higher supply, the quality in the exports market would be the key selling chip. The unfavorably high temperatures during November 2015 had a negative impact on soybean plants. It relected negatively on the soybean production quality. The lower quality from key export competitive countries’ key output regions could support the US soybean export sentiment. It helped futures prices on January 13, 2016.

Brazil’s official crop bureau, CONAB, increased the soybean output projection. The official production estimate was 102.1 million metric tons. This was higher than the U.S. Department of Agriculture’s monthly World Agriculture Supply and Demand Estimation report’s projections of 100 million metric tons. The higher-than-expected output consensus from the key competitive country kept soybean prices under pressure.

Concerned fertilizer business

The advance in soybean prices supports farmers’ income. It helps fertilizer companies gain through increased sales. Martin Midstream Partners (MMLP) rose by 2% on January 13, 2016. However, CF Industries Holdings (CF), CVR Partners (UAN), and Enterprise Products Partners (EPD) fell by 2.4%, 3.2%, and 6.4% on January 13, 2016. The Material Select Sector SPDR ETF (XLB) fell by 2.3% on January 13, 2016.

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