Soyabeans avoid longest losing streak this year

Soyabeans avoid longest losing streak this year

A slim gain for soyabean futures has helped them avoid their longest losing streak this year, but the crop is still struggling against the broader backdrop about waning demand from China.

A slim gain for soyabean futures has helped them avoid their longest losing streak this year, but the crop is still struggling against the broader backdrop about waning demand from China.

 China has remained conspicuously absent from soyabean buying activity in recent weeks after Washington and Beijing threatened imposing punitive, retaliatory tariffs on each others’ imports.

The Asian country is the US’s biggest export market for the crop. The US’s soyabean trade with China was worth $14bn in 2017, and a recent study by Purdue University in Indiana estimated Chinese imports of US soyabeans could drop by nearly two-thirds if Beijing imposed a 25 per cent import duty, and US production of the crop could fall by 15 per cent.

The most recent sale to China from private exporters, of 132,000 metric tons for the 2018/19 marketing year, was reported by the US Department of Agriculture on April 10.

Since then, though, Argentina and other buyers - including Europeans - have continued to purchase from the US. In fact, Argentina’s purchase of 120,000 tons of US soyabeans, also reported by USDA on April 10, was at the time the country’s biggest single purchase of US soya since 1997. It doubled down and bought another 120,000 tons the following day.

Argentina is the world’s third-biggest soyabean producer, behind the US and Brazil and ahead of China, but its crop is expected to shrink this year to a decade-low 40m tonnes on account of a severe drought.

The South American nation looks to have exceeded itself today, though, and bought 130,000 tons, the USDA said, with 70,000 tons due for delivery during the 2018/19 marketing year that begins on September 1.

Soyabean futures settled ⅛ of one cent higher to $10.06 ¾ a bushel, following a four-session losing streak and declines earlier on Tuesday. A five-day drop would have been the legume’s longest losing streak since mid-December last year.

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