After another year of a large enough soybean crop to meet current domestic and global demand, the price of the oilseed on the new crop November futures contract on the CBOT has traded in a range from $8.47 to $8.92 during October. On Tuesday, October 23, the November soybeans were at just under the $8.60 per bushel level.
2018 has been a different kind of year for the beans. It started in late February with a scare over supplies from South America. Drought conditions in Argentina caused the price of soybeans and soybean meal to soar. The beans reached a high of $10.71 per bushel on the continuous futures contract during the final week of February, which was the highest prices since early 2017. Soybean meal rallied to a high of $404 per ton in late April, which was the highest level since June 2016. The rise in the price of soybean meal caused the crush spread, or margin for processing soybeans into meal and oil, to soar. The rise in the price of the product provided support for the price of the raw oilseed.
Meanwhile, the U.S. is the world’s leading producer, and exporter of soybeans and China typically purchases one-quarter of the annual U.S. crop. In the spring of this year, a trade dispute between the U.S. and China began to unfold which sent the price of beans appreciably lower as U.S. beans found themselves in the crosshairs of the trade issue.
Beans fell to a decade-low
The price of soybean futures fell off the side of a bearish cliff in July. The selling had little to do with the weather conditions or any change in world dietary requirements; it came as a result of the trade dispute between the United States and China that caused the Chinese to walk
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