Soybean prices remain under pressure from China's declining demand

Soybean prices in the United States continue to fall as the new harvest approaches and amid uncertainty about demand from China, as there are rumors about its intentions to buy soybeans, and there are no real significant purchases of soybeans of either the old or new crop for quite some time.

November soybean futures fell 1.1% to 4 469.1/ton yesterday, losing 4% over the month.

Pressure on quotes is reinforced by an improvement in the state of crops and prospects for the soybean harvest in the United States and information about a decrease in imports to China against the background of higher forecasts for soybean production in South America in the new season.

According to the USDA's NASS weekly report, the number of crops in good or excellent condition increased by 1% per week to 57% (65% a year ago), and the maturation rate is in line with the 5-year average.

Due to the impact of Hurricane Ida on the operation of port terminals in the Strait of Mexico, soybean exports for the week amounted to only 68 thousand tons, which disappointed traders.

According to the average estimate of analysts released on the eve of the release of the USDA report, the yield of soybeans in the United States will be 51.32 bushels/acre, and production – 121.1 million tons, while the USDA in August estimated them at 50 bushels/acre and 118 million tons, respectively.

According to the General Customs Administration of the people's Republic of China, China imported 9.49 million tons of soybeans in August, which is 9.5% higher than in July, but inferior to 9.6 million tons imported in August 2020. traders are concerned that falling pork prices and high world soybean prices will lead to a decrease in demand for soybeans compared to last year, especially given the significant reserves.

Forecasts of an increase in soybean sowing areas in Brazil and a record harvest of 140-141 million tons allow us to hope for a further decline in world prices, which keeps China from actively purchasing American soybeans.