Soybean futures retreat as crude oil slump and geopolitical uncertainty weigh on May close
Near-month contracts and cash prices dipped as speculative funds reduced long positions, while export data showed Mexico as the primary buyer for old crop beans.
Soybean futures concluded May with a decline, pressured by a broader downturn in crude oil prices and shifting geopolitical dynamics surrounding a proposed agreement between the United States and Iran. Near-month contracts fell by 7 ¾ cents on Friday, while July contracts recorded a weekly loss of 9 ¾ cents. The national average cash bean price also retreated, dropping 9 ¼ cents to settle at $11.25 ¾.
The downward pressure on agricultural commodities was compounded by a $1.14 per barrel drop in crude oil prices, which often correlates with demand concerns for biofuels and transport costs. Market participants also adjusted positions ahead of the weekend as attention focused on diplomatic developments between Washington and Tehran, contributing to a cautious trading environment across commodity sectors.
In related segments of the soy complex, soymeal futures experienced a sharper decline, falling $2.20 to $4.30. July soymeal contracts dropped $2.10 for the week. In contrast, soy oil futures moved higher, with July contracts gaining 374 points for the week and broader soy oil futures rising between 49 and 102 points.
Supply-side activity remained active, with the United States Department of Agriculture (USDA) reporting a private export sale of 192,000 metric tonnes of soybeans. This transaction included 60,000 metric tonnes of old crop beans and 132,000 metric tonnes of new crop beans, destined for undisclosed locations.
Weekly export sales data revealed that 299,899 metric tonnes of old crop beans were sold during the week ending May 21. Mexico emerged as the lead buyer, securing 86,800 metric tonnes, while an additional 64,000 metric tonnes were sold to unknown destinations. New crop sales totalled 137,708 metric tonnes, with Mexico again leading purchases at 60,400 metric tonnes, followed by 27,000 metric tonnes to Taiwan.
Positioning data indicated a shift in sentiment among large traders. Speculative funds reduced their net long soybean positions by 18,252 contracts in the week ending May 26. Despite the reduction, their net long holdings remained substantial at 189,552 contracts of futures and options as of Tuesday.
Traders are now looking ahead to the release of April soybean crush data on Monday, with market expectations pointing to 214.7 million bushels of soybeans processed. Soybean oil stocks are currently estimated at 2.365 billion pounds, providing a backdrop for further price discovery in the coming sessions.
