Business

Soybean price jumped due to unexpected news

Until yesterday morning, soybeans in the Chicago market were in the lowest prices since December last year, since a record harvest was expected. But, on Tuesday the price of the oilseed had a strong rebound immediately after the release of the monthly report from the United States Department of Agriculture (USDA), why?

As in the United States more than 80% of the 2021/22 season of soybeans and corn were already harvested, the data that the USDA reported yesterday was relevant and eagerly awaited given that they would be the definitive numbers of the harvest.

Soybean futures traders in the Chicago market were surprised by the reduction of production estimates by more than half a million tons. The reason is that crop yields have worsened in the major producing states of the country led by Joe Biden.

“What was most surprising in the market was a reduction in production because an increase in the soybean production estimate was expected. As soon as the USDA reported a cut, the increases that were seen in the market began to occur”, explained Javier Treboux , analyst of the Rosario Stock Exchange (BCR) to El Cronista.

Prior to publication, the November soybean contract was trading u $ s 432.84 per ton. Immediately after it became known, prices jumped $ 12, for after a correction close at u $ s 440.74. For its part, the January position closed above $ 445 a ton.

Specifically, the USDA projected a surprising drop in oilseed production, which the current season will end at 120.4 million tons. What was unexpected was that a rise of 0.9 million tons was expected – and not a drop of 0.7 million tons – which would transform the campaign into a record harvest.

“The result is attributed to a performance loss in many producing states like Indiana, Iowa, Ohio and Kansas. In this way, the forecasts that predicted 2021/22 as the one with the highest production in history in the United States are moving away“he pointed Treboux from the BCR team.

The data that prevented a bigger jump in the international price of soybeans was that the expectation of US exports fell. In this way, the stocks expected by the USDA for the close of the current season grow from 8.71 to 9.25 million tons.

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HELEN HERNANDEZ

Helen Hernandez is our best writer. Helen writes about social news and celebrity gossip. She loves watching movies since childhood. Email: Helen@oicanadian.com Phone : +1 281-333-2229

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