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Soybeans Close Higher as Hot Weather Persists in Brazil

Prices continue their upward trajectory after yesterday’s 13¢ gain.

Soybeans closed higher on Friday as investors keep an eye on hot, dry weather in Brazil. 

Temperatures in the South American country have been in the 90s this week, according to forecasters. Commodity Weather Group said in a report that the weather likely will stay hot and could expand next week, which could lead to further yield losses. 

About 20% of soybeans, 35% of first-crop corn, 50% of cotton, and 75% of the coffee crop is at risk, CWG said. 

Soybean futures for March delivery rose 7 1/4¢ to $9.15 a bushel on the Chicago Board of Trade. Soy meal added $2.50 to $314.70 a short ton, and soy oil gained 0.27¢ to 29.04¢ a pound.

Corn futures added 3/4¢ to $3.80 3/4 a bushel. 

Wheat fell 1¢ to $5.16 3/4 a bushel while Kansas City futures rose 1 1/4¢ to $5.05 1/2 a bushel.

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Thursday’s Market Recap

Soybeans jumped double digits higher Thursday after the production outlook for Brazil was lowered. 

Celeres, a Brazilian consultancy, reduced its soybean output forecast amid ongoing hot and dry weather to 117.2 million metric tons. The USDA last month pegged output in the country at 122 million tons.

Temperatures in parts of Brazil are in the mid- to upper-90s, which likely will continue through the next two weeks, particularly in the northeastern part of the country, Commodity Weather Group said in a report Thursday morning.

The most serious risks to yield are to about 20% of the country’s soy crop, 30% of first-crop corn, and half of cotton areas. The threat to the coffee crop could expand to as much as three fourths of the growing area, the forecaster said. 

Rainfall in the center-south in the past 24 hours favored northwestern Rio Grande do Sul, and more precipitation is expected through the end of the week, which may limit losses. 

Keeping prices capped, however, is the ongoing trade tension between the U.S. and China. While talks last week were reportedly successful, there was no movement on structural disagreements with regard to intellectual property, Sen. Charles Grassley (R-IA) said earlier this week. A top Chinese official is expected to be in Washington later this month to continue negotiations. 

The ongoing partial government shutdown, with no end in sight, is also weighing on sentiment. 

Soybean futures for March delivery rose 13¢ to $9.07½ a bushel on the Chicago Board of Trade. Soy meal added $2.20 to $312.30 a short ton, and soy oil gained 0.53¢ to 28.76¢ a pound.

Corn futures added 6½¢ to $3.80½ a bushel. 

Wheat rebounded, rising 5½¢ to $5.18 a bushel while Kansas City futures jumped 9¢ to $5.04½ a bushel.

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Wednesday’s Market Recap

Soybeans closed higher Wednesday amid concerns about hot, dry weather in Brazil.

Commodity Weather Group said in a report that it expects temperatures that have been in the low- to mid-90s in central and northeastern Brazil to “intensify further” through Friday, adding stress on crops. 

Temperatures also will be warmer next week in the areas, the forecaster said. Some rain is in the forecast, though totals won’t be heavy and they’ll be scattered, CWG said. 

Prices also are rising amid confidence that the U.S. and China will be able to hammer out some sort of trade agreement by the March 1 deadline, though confidence took a hit when Senator Charles Grassley (R-IA) told reporters that some key issues weren’t worked out during last week’s meetings between negotiators from the world’s largest economies. 

Officials from both sides, however, have said the talks went well and that they’re confident a deal can be reached. 

Soybean futures for March delivery rose 2¢ to $8.95¼ a bushel on the Chicago Board of Trade. Soy meal added 90¢ to $310.20 a short ton, while soy oil fell 0.03¢ to 28.21¢ a pound.

Corn futures added 2¾¢ to $3.74 a bushel. 

Wheat gained 1¢ to $5.12 a bushel while Kansas City futures fell ¼¢ to $4.95¼ a bushel.

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Tuesday’s Market Recap

Soybeans closed lower, though off session lows, on Tuesday amid concerns about demand from China.

China’s customs administration said yesterday that imports of soybeans in December fell 40% year-over-year. That, combined with worries about swine fever in the country, which could reduce demand, led to selling after prices were little changed in the overnight session.

It wasn’t just soybean imports that were hurting in December. Chinese government data showed trade and factory activity also slowed, leading some to believe the world’s second-largest economy faces more stringent stimulus measures to give it a boost.

The overall slowdown in China is weighing on the minds of those in the agriculture industry. 

On a positive note, however, trade relations between the U.S. and China have been trending up after last week’s meetings that lasted more than two days. China will send a top negotiator to Washington this month to continue the talks. 

Soybean futures for March delivery fell 8 3/4¢ to $8.94 3/4 a bushel on the Chicago Board of Trade. Soy meal lost $2.10 to $309.70 a short ton, and soy oil declined 0.13¢ to 28.27¢ a pound.

Corn futures lost 6 3/4¢ to $3.71 3/4 a bushel. 

Wheat fell 2 3/4¢ to $5.11 1/2 a bushel while Kansas City futures lost 4 1/4¢ to $4.94 3/4 a bushel. 

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Monday’s Market Recap

Soybeans closed lower Monday after China said imports of soybeans last month plunged. 

The country’s customs administration said in a report that imports of the oilseeds fell 40% year-over-year in December. African swine fever has become an issue in the counry, which could limit future demand, Reuters reported. 

Prices also fell due to a lack of daily or weekly export sales data from the U.S. Department of Agriculture, which hasn’t released any information since the start of the partial government shutdown, which is now entering its fourth week and is officially the longest on record.

Without the information, some traders seem hesitant to buy soybeans, worried that when data is released export sales will be below expectations. 

China’s trade surplus with the U.S. rose to $323.3 billion in 2018, a 17% year-over-year increase, China said on Monday. That’s the highest since at least 2006, according to Reuters. Exports to the U.S. jumped 11% year-on-year while imports into the Asian country rose 0.7%, Beijing said. 

Still, there’s reason for optimism after officials from the world’s two largest economies met last week to hammer out an agreement. The talks ended on a positive note, and the U.S. said one of China’s top negotiators would come to Washington later this month to continue negotiations. 

Soybean futures for March delivery fell 5¾¢ to $9.04½ a bushel on the Chicago Board of Trade. Soy meal lost $2.50 to $312.10 a short ton, and soy oil declined 0.01¢ to 28.40¢ a pound.

Corn futures were higher, rising 1¢ to $3.79¼ a bushel. 

Wheat fell 4¾¢ to $5.14¾ a bushel while Kansas City futures lost 4½¢ to $5 a bushel. 

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