US soybean prices of the front dates fall significantly
High future soybean supply and the current shortage of immediately available goods have so far led to a split in forward prices for a transitional period. It was only a matter of time before the different prices converged. That time now seems to have come.
On the Chicago Mercantile Exchange, prices for beans have fallen drastically to the limit-down level. The triggering moments are the sell-off of beans from the old harvest in order to take advantage of the last chance to achieve high prices, expiring option contracts for August and the observation that US farmers are concluding hedge sales in order to quickly take advantage of the currently still high prices in view of the favorable growing conditions.
Rumors about the release of 3 million tonnes of soya from Chinese stocks signal a possible low demand from this importing country.
Soybean meal is also lagging behind somewhat hesitantly, although in this case the physical shortage is even more pronounced.
A rising euro exchange rate is providing more purchasing power and could support the price decline in the eurozone.
