NAPERVILLE, Illinois, June 5 (Reuters) - After challenging their yearly high a month ago, November soybean futures on the Chicago Board of Trade declined on Wednesday for a seventh consecutive session, a run that started just after large speculators raced out of shorts to a near-flat position.
June is the most common month for new-crop November beans to ink yearly highs, though the month can often feature sharp sell-offs. However, the current selling streak has come a little sooner than those in recent years despite U.S. farmers still needing to sow 20% of their soybean crop.
The last time new-crop soybean futures fell for seven or more consecutive sessions within the year of expiry was in March 2023, and that 13-session streak was the longest in at least 50 years. The time before that was a nine-session downturn during January 2020.
Seven-day losses through Wednesday totaled 5.7% with November soybeans settling at $11.50-1/2 per bushel, their lowest settle since April 18 and the date’s lowest in four years. New-crop beans in late May had traded above the 2023 levels.
Maximum seven-session declines for November soybeans last year were around 7% and had occurred multiple times, and large money managers heading into June were nearly flat CBOT soybeans after a three-year streak in bullish territory.
But money managers held a record net short in early March 2024 before staging a record round of short covering in early May on Brazilian crop fears. As of May 28, money managers’ net short of 14,218 CBOT soybean futures and options contracts was the lightest since the start of the year.
Another theme separating this year from the past three is the relatively low premium of old-crop beans versus new-crop, indicating the immediate need for supplies is less urgent than in recent years. Nearby July beans are trading around 27 cents per bushel above November beans.
That spread briefly turned negative in April, the first such instance since 2020, though the July-November inverse had been between $1.50 and $1.90 to start the last three Junes. Early June 2019 featured the largest carry, close to 30 cents per bushel.
U.S. soybean planting pace has been ahead of the five-year average pace and losses in Brazil due to hot and dry conditions in the north and flooding in the south have been less severe than feared.
Additionally, Brazilian shortfalls have not translated into U.S. soybean export demand, which relative to expectations is the worst in 23 years ahead of the upcoming 2024-25 season.
The U.S. Department of Agriculture’s first health assessment of U.S. soybeans is expected on Monday. Initial U.S. corn conditions came in well above expectations this week at 75% good-to-excellent, though soybean conditions normally start a little lower than those for corn, averaging 68% over the last decade.
If November soybeans do not top Jan. 2’s high of $12.37 per bushel, it will be the first time since 1999 that new-crop soybeans set their year-of-expiry high in January. The contract had reached $12.30-1/2 on May 7, up considerably from the year’s low of $11.22-3/4 set on Feb. 26.
Hopeful soybean bulls could get support at the end of the month when USDA publishes its acreage survey. The last time the June survey turned up more U.S. soybean plantings than the trade expected was in 2014. Karen Braun is a market analyst for Reuters. Views expressed above are her own.
(Writing by Karen Braun Editing by Matthew Lewis)
