Soybeans price spikes as WASDE report points to lower yields

Soybean prices bounced back this week after an encouraging report by the USDA. Data by TradingView shows that the price jumped from a low of $1,272 on Thursday to a high of $1,320. Despite the rebound, soybeans remains 17% from the highest level this year.

The main news for the soaring soybeans and Teucrium Soybean ETF (SOYB) was the monthly WASDE report by the USDA. The report showed that the total production in the US will drop by 42 million bushels to 4.1 billion. 

At the same time, US farmers will harvest a lower yield per acre. Precisely, they will harvest 49.6 bushels, down by 0.5 bushels from the previous estimate. States like Kansas, Michigan, and Nebraska will be the most affected. 

Meanwhile, soybeans exports are set to drop by 35 million bushels to 1.76 billion because of the soaring competition from South American countries like Brazil. Historically, the US has struggled to compete with lower-cost producing countries like Brazil and Argentina. The report added:

“Global 2023/24 soybean exports are lowered 0.2 million tons to 168.2 million with lower exports for the United States partly offset by higher shipments for Brazil. Soybean imports are lowered for Pakistan.”

The soybeans market is changing rapidly as weather and geopolitical issues remain. Brazil has increased its acreage to take advantage of tensions between the US and China. At the same time, China is boosting production to reduce its reliance of the United States.

Soybeans producers are also seeking other buyers like India, where protein intake is rising. It is also being used in the energy industry, especially in sustainable aviation fuel (SAF), which is gaining popularity.