Soybean futures had been under pressure from the flailing Brazilian currency (as posted here two weeks ago), but now a top importer of soybean oilseed is cutting the price outlook for soybeans once again due to the declining sentiment around China’s yuan. Soybean futures are down .07 cents today currently trading at $8.84 per bushel at the Chicago Board of Trade.
The insatiable demand for soybeans used for China’s enormous pork industry’s animal feed makes it the world’s largest soybean importer, however, with their stock market weakened, their economy stagnating, it means their yuan will have less buying power for imports. The soybean importer has lowered the estimated price for soybeans from $9.10 (two months ago) to $8.75 a bushel in the December time frame.
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shares his view regarding the fundamental situation of the soybean futures markets by stating, “It has been an unfortunate domino effect in China ultimately leading to their government devaluating the yuan.” Plotkin added, “This was bad news for soybean demand, but soybean (futures) declined by 11% following this announcement so hopefully the fall may limited.”
Soybean futures trend is technically down, albeit sideways-to-down for the past two months. I think soybean futures will have to get this harvest completely out of the way before it can find a certain direction to clearly trend.
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