Soybean output plunges amid dry weather concerns

SOYBEAN FUTURES SOFTENED at the close of the week’s trading activities on the Chicago Board of Trade (CBOT), but the market still enjoyed a weekly gain as adverse weather in Brazil and Argentina curbed prospects for bumper output, according to trade dealers.

The most active soybean contract on the CBOT shed 0.3 percent to $13.83-1/2 a bushel. Dealers however observed that the legume traded three percent higher for the week.

A drought in southern Brazil and increasingly torrid conditions in Argentina have put attention on potential yield losses for soybean and corn crops in the major exporting countries.

AgRural, a Brazilian based agribusiness consultancy, said soybean prices in the South American country have climbed above last year’s highs as hopes for another record harvest are dashed by dry weather in southern states.

Cutting its crop outlook by 11 million tonnes, AgRural now sees Brazil’s 2021/22 soybean crop at 133.4 million tonnes, down from an earlier forecast of 144.7 million. Brazil’s last crop cycle produced a record 137.3 million tonnes of soybeans.

Production in Argentina’s agricultural region is also pessimistic as weather reports said the the third largest soybean producing country in the world will be hit in the coming days by a heatwave accompanied by little or no rainfall.

According to the Buenos Aires Grains Exchange, the situation has added pressure to adverse conditions that its corn and soybean crops have suffered for weeks.

Export volumes also fell below trade expectations as 449,800 tonnes were recorded, resulting in a marketing year low.