Rising US soya export demand battles benign weather, looming crop report

NAPERVILLE, (Illinois): August is the least likely month of the US growing season to feature a rally in Chicago-traded soyabeans, and weather forecasts through mid-month seem to favour that trend in 2023. But new-crop export demand has started to pick up and, despite expectations for supportive weather, US soyabean production is far from settled given this season’s hardships.

CBOT November soyabeans are amid their biggest downturn since May, having tumbled nearly 7% since marking their highest price of the year so far on July 24.

Grains have performed significantly worse over that period with December corn and CBOT September wheat down 13% and 17%, respectively. That has lifted soyabeans’ price advantage versus corn to the highest August levels in three years.

As of July 25, speculators held their most bullish late-July soyabean view in seven years, but they were just slightly bullish corn, perhaps begrudgingly.

In the last decade, November soyabeans strengthened throughout August only twice - in 2020 and 2013. Perhaps not coincidentally, those were by far the decade’s driest Augusts in the heart of the Midwest, specifically in Iowa and Illinois.

That scenario is not on the horizon for now as weather outlooks suggest a normal to wet bias with no heat across most of the Corn Belt for the next couple weeks.