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Lower-Than-Expected Export Inspections Influenced Soybean Prices

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Soybean prices drop

Soybean futures contracts on CBOT (Chicago Board of Trade) for March expiry fell by 0.58% and settled at $8.62 per bushel on February 8, 2016. Soybean futures prices fell due to dubious export cues from USDA’s weekly export inspections report. Following the prices on CBOT, the Teucrium Soybean Fund (SOYB) fell by 0.69% on February 8, 2016.

The US Department of Agriculture released a weekly report of Grains Inspected or Weighed for Exports on February 8, 2016. Soybean weekly export inspections were 1,172,661 metric tons. The export inspections for the week were 2.0% lower from the last week and 12.6% lower from the previous two-week average. The year-to-date soybean export inspections of 33,998,3313 metric tons were down 12.7% compared to last year. Speculation of lower soybean exports due to unsure Chinese import demand negatively affected the soybean prices on February 8, 2016.

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The US Department of Agriculture projected that Argentinian soybean production could remain at 58.5 million tons for 2015-16. The speculation of higher soybean production from Argentina along with high inventory could increase the supply in the world export market in the spring of 2016, and thus drive prices down.

Concerned fertilizer businesses

The slide in soybean prices dragged down fertilizer companies. Fertilizer businesses such as Chemical & Mining Co. of Chile (SQM), CVR Partners (UAN), Monsanto (MON), and Enterprise Products Partners (EPD) fell by 2%, 9.7%, 3.5%, and 7.0%, respectively, on February 8 due to the fall in soybean prices. The WisdomTree India Earnings Fund (EPI) fell by 0.61% with the fall in soybean prices on February 8, 2016.

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