Soymeal swings on weather, export demand, then broad selloff
Dry July weather lifted soy complex Forecasts for a dry start to July in key U.S. growing areas raised concerns about the soybean crop, pushing soybean and soymeal futures higher. Less rain can shrink the crop, tightening supply and supporting soymeal prices.
Weather is a major supply force that pushed soymeal up early in the period.
Strong export demand for soybeans and meal U.S. soybean export sales hit multi-week and marketing-year highs, with big purchases from China and unknown destinations. Soymeal sales also stayed within trade estimates. Strong demand for beans supports soymeal because meal is a key product made from crushing soybeans.
Export demand is a core demand driver that supported soymeal prices.
Late-July broad selloff in soy complex Soybean and soymeal futures plunged as crude oil tumbled and speculative traders held a large net long position, triggering a wave of selling. A sharp drop in energy prices can reduce demand for soy-based biofuels, adding pressure to the whole soy complex.
This was the period's biggest price-moving event, dragging soymeal sharply lower.
China to auction state soybean reserves China's state-owned Sinograin will auction 504,000 metric tons of imported soybeans. If the auction supplies the market, it could reduce China's near-term demand for imported U.S. soybeans, softening demand for soymeal and weighing on prices.
This new supply event could reduce demand for U.S. soybeans and soymeal.