How Did the WASDE Report Influence Soybean Prices?



Soybean prices rose

Soybean prices on CBOT (Chicago Board of Trade) for March expiry rose slightly by 0.28% and settled at $8.80 per bushel on March 9, 2016. Soybean futures prices continued the current rising price movement. The Teucrium Soybean Fund ETF (SOYB) rose by 0.06% on March 9, 2016, with an increase in soybean prices on CBOT.

The US Department of Agriculture’s World Agriculture Supply and Demand Estimation Report was released on March 9, 2016. Analysts had been awaiting data regarding the increasing global soybean supply, uncertainties over the Brazilian output, export prospects, and ending inventory projections for the marketing year. However, the report failed to influence futures prices on March 9.

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The US soybean balance sheet has estimated a fall of 10 million bushels and 1 million bushels in crushing activity and soybean production from cues of lower domestic consumption. Residual usage has also been projected to fall by 5 million bushels to 34 million bushels, which led to a rise in inventories by 10 million bushels in the marketing year 2015–16.

Soybean seeds have been projected to increase by 4 million bushels to 96 million bushels during the 2015–16 marketing year. Analysts also have lower planting projections for next season. Weaker supply factors and domestic usage indications negatively affected the screening of soybean prices in the near term. The WASDE report maximum estimate has declined to $9.25 per bushel from $9.55 in the previous month’s prediction.

The market players didn’t show any enthusiasm towards the report. Soybean prices stayed on the current channel on March 9, 2016.

Concerned fertilizer stocks

Advancing soybean prices boost farmer income and thus sales for fertilizer companies. On March 9, 2016, Agrium (AGU), Terra Nitrogen Company (TNH), Chemical & Mining Co. of Chile (SQM), and Mosaic Company (MOS) rose by 0.96%, 0.45%, 0.24%, and 3.4%, respectively. The iShares MSCI Brazil Index (EWZ) rose by 1% on March 9, 2016, with the rise in soybean prices.


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