About Soybean Futures and Corn Futures
Soybean and Corn are among the most traded commodities in the global agriculture industry. They are widely cultivated and consumed in various parts of the world, making them essential staples in many countries' diets and agricultural economies.
Due to their extensive applications, Soybean and Corn play pivotal roles in the global agricultural landscape, serving as vital crops with extensive applications and widespread consumption.
As such, soybean and corn futures contracts are highly popular and actively traded in global commodity markets. Their trading volumes and price movements have a significant impact on the global agricultural market, and they remain key commodities to watch for traders, investors, and policymakers alike.
This article will provide insights into the latest developments surrounding the different Soybean and Corn Futures for the month of August 2023. The information presented in this article is largely based on Orient Research Institute's Weekly Updates on Fundamental Data of Agricultural Products dated 30072023, and other credited sources.
Soybean and Corn Futures Trading Singapore
As Soybean and Corn Futures are one of the most popular commodities futures to be traded, the future contracts are available on several exchanges. Traders can trade both Soybean futures and corn futures through expert investor Singapore company, Orient Futures Singapore.
Orient Futures Singapore is a licensed Singapore Forex and Futures Broker that will enable traders to engage in futures trading in the international and China market. Click here to find out the exchanges and products available, including QFI China Scheme and internationalized products.
Soybean Futures, Soybean Meal Futures and Soybean Oil Futures contracts are available on the Dalian Commodity Exchange (DCE China) and the Chicago Board of Trade (CBOT). Please note that Dalian Commodity Exchange trading hours are as follows: 9:00AM - 11:30AM and 1:30PM - 3:00PM Beijing Time. The Dalian Commodity Exchange Soybean futures contracts include Soybean No.1 Futures, Soybean No.2 Futures, Soybean Meal Futures and Soybean Oil Futures.
Corn Futures are available on the Chicago Board of Trade (CBOT), New York Exchange Euronext (NYSE) and Tokyo Grain Exchange (TGE). Please note that CBOT Corn Market trading hours are as follows: 7:00p.m. - 7:45a.m. and 8:30a.m. - 1:20p.m. (Settles 1:15p.m.) (Sun-Fri) CST.
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Market News
According to the World Agricultural Supply and Demand Estimates (WASDE) July report, the projected global soybean and corn production for the upcoming 2023/2024 crop year is forecasted to be 4.3 billion and 55 million bushels respectively.
Soybean Supply & Demand
In the Chinese market, shipments in the Northeast China have been operating normally, although there are a still a limited supply of high-protein soybeans. On the other hand, the southern region of China faces challenges with their shipments.
The one-way auction of soybeans by the China Grain Reserves Corporation did not perform well, and the two-way auction had all transactions completed. Local surplus stocks remain minimal amid moderate demand due to hot weather.
In the international market, major soybean-producing areas in the United States experienced varying weather conditions. Regions such as Minnesota, Wisconsin, and Michigan are receiving 10-50mm of rainfall, while others had little significant precipitation. The US Soybean Good-to-Excellent Rating declined to 54%, and the previous week's weather has worsened crop growth conditions. By July 25, the proportion of drought-stricken US soybeans increased by 3% to 53%.
However, weather forecasts for the next week show improvements, with temperatures not exceeding 30°C, and improvement in precipitation forecast. This might cause the Chicago Board of Trade CBOT soybeans to experience a slight decline in prices.
Last week, there were signs of a turning point in US soybean exports, with a slowdown in Brazilian soybean exports and higher CNF prices for September and October. The United States Department of Agriculture (USDA) reported significant private exporter sales of 1.41 million tons of soybeans for shipment in 23/24 MY. Attention will remain on weather conditions in production areas, and US soybeans are expected to maintain high levels of operation.
Soybean Meal Supply and Demand
In the domestic China market, soybean meal is showing a stronger trend than the international market. Although China's major source of imported soybeans is still Brazil, but with the rise in CNF prices of Brazilian soybeans, combined with the previous depreciation of the Chinese Yuan, this has resulted in a higher cost of imported soybeans than the CBOT soybean futures prices.
As a result, soybean meal futures prices need to be stronger than the international market to repair the profit margins.
Additionally, the slowdown in Brazilian exports will impact China's soybean imports after August. Last week, the rise in pork prices improved breeding profitability. With the peak consumption period for soybean meal approaching, oil mills' basis prices will continue to rise. Despite a weak current spot basis, the forward basis remains optimistic, indicating the expectation of stronger soybean meal futures prices in the future.
Soybean Oil Supply and Demand
Soybean oil inventory in China has increased to about 1.0695 million tons, with high imports contributing to abundant stocks. Weekly operating rates of oil mills and weekly soybean crushing volume have rebounded, increasing the production and supply of soybean oil.
Based on the tracking statistics of Mysteel Agricultural Products on imported soybean shipments, China's imports of soybeans in July are expected to reach 11 million tons, and preliminary estimates for imports in August and September are 8.1 million tons and 7.5 million tons, respectively.
However, a predicted reduction in soybean imports in the fourth quarter may impact soybean oil stocks. This might lead to prices fluctuations. The seasonal high production of palm oil may also restrict rising oil prices, making the future market weak and volatile. Close monitoring of weather conditions in production areas is crucial.
Corn Supply and Demand
According to the WASDE report, the outlook for corn's supply and demand in the US for the 2023/24 season shows slightly higher supplies and ending stocks.
Beginning stocks are reduced due to increased feed and residual use in the previous season. The forecast for corn production is higher, primarily driven by an increase in planted and harvested area. However, yield is slightly reduced due to adverse weather conditions.
The impact of dry weather in June is expected to be moderated by timely rainfall and cooler temperatures in early July. With supply rising and use remaining unchanged, supplies are expected to increase.
The global coarse grain production forecast for 2023/24 is slightly higher, with foreign corn production also showing a slight increase, despite some reductions in certain regions.
Soybean Futures Prices
According to Trading Economics, Soybean futures prices dropped below $15 per bushel on August 2, reaching the lowest level since July 12. This is due to the milder weather in the US Midwest which eased supply concerns. The recent high of $15.80 on July 27 was driven by worries about US crop yields and strong Chinese demand.
The USDA has revised its soybean yield forecast, but there are signs that actual yields may be even lower. This adds to the market uncertainty. Concurrently, Brazilian soybean exports surged to 6.2 million metric tons in the first half of July, a significant increase from last year, largely fueled by robust demand from China.
Corn Futures Prices
According to Trading Economics, Corn futures experienced a sharp decline to $5.10 per bushel, retreating from the one-month high of $5.60 reached on July 24th. This drop was primarily driven by favorable weather forecasts in the US, which raised expectations for improved corn production and supply.
Cooler temperatures in key Midwest regions eased concerns about crop growth, leading to expectations of stronger yields in the upcoming late summer and autumn harvest. These developments countered worries of low domestic production and outweighed recent global grain market surges triggered by Russia's actions impacting Ukrainian corn exports.
Start Trading With Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
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