CBoT soybean futures prices are starting the last day before the weekend with stable prices. The financial instrument has been posting gains for the past three weeks as China has pledged to buy more US agricultural goods in the first step of a trade deal.
This agreement is expected to be signed by both sides in early January.
Chinese importers bought at least two shiploads of US soybeans out of a further quantity for which Beijing has lowered import tariffs. There is no doubt that the trade dispute has depressed soybean prices, but traders in Australia doubt whether prices need to rise further now. They point to the forthcoming soybean harvest in Brazil, which is once again set to break records. The fields in Argentina are also looking good and African swine fever is still rampant in China.
If the weather conditions in South America remain optimal, competition among exporters will soon be fierce again. In Argentina, more than 70% of the planned soybean acreage for the 2020 harvest has already been sown, according to the Buenos Aires Grains Exchange yesterday.
A survey of market analysts revealed that Brazil is heading for a new record with 122.7 million tons of soybeans. In China, demand for soybean meal is falling because the pig herd has collapsed and the government-subsidized re-stocking program is only making slow progress.
Source
HANSA Terminhandel
