Soybean & soybean oil futures move in opposite directions
Soybean oil futures rose steadily all last week, supported by rising palm oil prices. Dec-21 bean oil futures rose from 58.85 cents per bushel to 61.40 cents per bushel, nearing a two-month high if futures climb to 62.3 cents per pound this week.
Nov-21 soybean futures fell lower each day last week before bouncing off a six-month low of $11.98 per bushel Thursday and closed Friday at $12.18 per bushel, virtually unchanged on the week.
S&D and fundamental factors
Soybeans were dealt a bearish surprise in Tuesday’s WASDE report as USDA took up yield from 50.6 bushels per acre to 51.5 bushels per acre. This is impressive considering a third of the crop dealt with drought this summer. If realized, this would be the second-highest yield on record, just behind the 2016/17 yield of 51.9 bushels per acre.
Rumors of additional Chinese buying continue to percolate, with suggestions that the country is very short from November through January. U.S. soybean prices are the cheapest on the global market at $494 per ton compared to Brazil and Argentina at $516 and $534 per ton, respectively.
Weather, macro indicators, and news
Fertilizer costs are more than double year-ago levels due to production losses from Hurricane Ida, logistical issues, and a lack of exports from China (the largest producer of urea and phosphate). This could lead to more acres switching from corn to soybeans in 2022 because corn is a very large user of fertilizer and nitrogen while soybeans do not need as much of these inputs.
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