Rain forecast in Brazil and Argentina keeps soybean prices down
Soybean futures on the Chicago Mercantile Exchange fell on Friday to their lowest price in more than a week due to continued pressure from rain forecasts in dry growing regions in South America, analysts said.
Soybean futures have fallen about 3% since hitting July highs a week ago on fears of a drought crippling crops in southern Brazil and Argentina.
“We were expecting a bigger fall in South American soybean production, but given the recent weather forecast, it may not be as bad as previously expected,” Ole Howe, director of advisory services at agricultural brokerage IKON Commodities in Sydney, “
“Prices have fallen to levels that represent good value, especially if the weather in South America returns to hot and dry weather,” Tomm Pfitzenmeier, an analyst at Summit Commodity Brokerage in Iowa.”
Weather forecasts indicate that the drylands of Argentina, the world’s largest exporter of processed soybeans and the second largest producer of corn, could experience significant rainfall. However, some analysts are cautious after the heat wave exacerbated the La Niña-related drought, oilworld.ru reports. The long-term forecast assumes normal weather in central and northern Brazil, but a return to drier weather is possible in southern Brazil, northern Argentina and Paraguay.