Soybean price at lowest level since August 2017

With the falling price for soy beans, it must be noted that the price comes from a high level. In mid-May, more than $380 per tonne was still being paid, but now around $350 per tonne is being paid. However, the price is still higher than in previous years in the same period.

Everything seems to be running smoothly in the US, as far as soy is concerned. The sowing is going smoothly and is almost complete. The growing conditions are also ideal. The conditions of the crop are therefore qualified as very good. Weekly exports are also continuing well; last week it amounted to more than 600.000 tons.

(Text continues below the chart)The soybean price shows a sharp decline on the CBoT in Chicago.

Influence of trade tensions
The tensions of the trade war are reflected in the fact that people are afraid that China will impose import tariffs of 25% on soy from the US. However, according to Chinese media, the trade dispute has not had much impact on the market so far. However, there have been buyers who have purchased additional soybeans as a result.

The fact that the influence of the trade tensions is not yet very great is because during this period soybeans are mainly purchased from Brazil (harvesting is now in full swing there). This was also evident from the fact that Brazil exported a record quantity (12,4 million tons) to China in May. However, the truck drivers' strikes are causing significant delays output.

Own soybean cultivation
Yet there is definitely something going on. Chinese authorities have said that more soybeans need to be grown to reduce their dependence on the US. New expectations from the Chinese agriculture ministry also show that imports will decline. That would be the case for the first time in decades.

The WASDE report from the USDA (the US Department of Agriculture) shows that global soy production increases to 355 million tons. That is 700.000 tons more than the expectations outlined in the May report. The increase is because the Brazilian harvest is higher (120 million tons). However, this could cause the price of soy to fall. On the other hand, the report showed that there is more demand for soybeans, because there will be a lot of 'crushing'.