Four factors will affect soybean futures trading in August

25-Jul-2024 11:50 AM

Chicago. After the completion of soybean sowing in America, the crop is still in various stages of development and several weeks are left for its harvesting to begin.

Meanwhile, the price of soybean has fallen to the lowest level in the last four years, due to which market analysts are unable to understand what will be the condition and direction of prices during the coming weeks.

Actually, this time there are chances of a great production of soybean in America. Now the question arises whether the trend of softening in its price will continue or will it remain stable around the current price level.

This question also exists whether the production of soybean will decrease? Will the atmosphere of fluctuation in the price of this oilseed crop be created soon or will it be created late.

If it is assumed that the price of soybean has fallen to the bottom, then what are the factors that can prove to be helpful in increasing it? Is there any special hope of such a rise? It is necessary to keep an eye on the four factors that affect the future trading and price of soybean in August.

The first important factor is the weather, the month of August proves to be a make or break for the soybean crop from the weather point of view.

At present, the weather conditions in the US are quite favourable and 68 percent of the soybean crop is estimated to be in encouraging condition.

If the weather remains hot and dry in August, soybean prices may get some support. The second factor is the monthly report of the US Department of Agriculture (USDA) which is going to be released on August 12.

Although this will be a regular monthly crop review report, many aspects will be updated in it. New information will come out on the condition of the crop, yield rate, quality and stock condition etc., which may partially affect the futures price. 

The third factor is the financial condition of investors and speculators, which needs to be monitored.

At the end of July, it is likely that it will have more than 1.85 lakh short-term contracts. If the pace of sales increases, pressure on the futures price may increase. 

The fourth factor is the export demand for soybean in August. It will be necessary to see how much soybean is contracted for advance export from the 2024-25 season production, which will be delivered in October or later. All attention will be focused on China's purchases.