Soybeans Extend Drop on Tepid Demand and Good US Weather

(Bloomberg) -- Soybeans extended a drop to an almost four-year low in Chicago amid tepid demand for US beans and good weather for crops there.

Export sales for US soybeans are expected to total 510,000 tons in the week ending July 11, according to a Bloomberg survey of analysts. While that would be up from the previous week, it’s well below last year’s amount, and highlights the tough competition from Brazilian and Argentinian supplies.

“An increase in US demand has yet to be seen,” analysts at the Hightower Report said in a note. Meanwhile, the slump in prices has seen China “dramatically” increase purchases of Brazilian beans, they said.

Soybean futures fell for a second day on Thursday, declining as much as 0.9%. Soybean meal prices also retreated.

Better weather conditions lately have also improved prospects for US crops. Rains are expected in the next 11 to 15 days, offsetting some dryness in the Midwest, according to Commodity Weather Group. Only 10% of current corn and soy crops are seen too dry, after a recent tropical storm.