Hurricane Laura, a Category 4 storm, is not expected to impact top US soybean producing states, market sources said.
While the persisting dry weather in the Midwest has kept the soybean market bullish, Hurricane Laura is not expected to affect the oilseed market trading in coming days, an agricultural analyst said.
S&P Global Platts assessed SOYBEX FOB New Orleans for October loading at $377.45/mt on Aug. 26, up 3% month on month.
The storm is expected to make landfall near Texas and Louisiana border areas on Aug. 27, before making a turn to the right toward the East Coast, weather agency Maxar said Aug. 26.
This should keep the heaviest rainfall from reaching the major corn and soybean areas in the Midwest -- the top US soy producing region, but rain is still expected to reach as far north as southeastern Missouri, far southern Illinois, southern Indiana, and Ohio, it added.
According to a top official in the US Department of Agriculture, rice and cotton are the crops most severely impacted by the storm, while the corn belt will remain largely unscathed.
With Laura remaining south of the corn belt, hot and dry weather is expected to continue over the next few days in the central and western Midwest, which will further increase stress on corn and soybeans, Maxar said.
Dry weather in majority of the Midwest is expected to lower the soybean crop quality, which means a lower yield and decrease in supply in the 2020-21 marketing year, which began on Sept. 1.
According to the US Department of Agriculture's latest progress report, the domestic soybean crop condition was rated at 69% good to excellent, a fall of five percentage points in the past two weeks.
The shortage of top soil moisture in many parts of Midwest was in the 70% bracket as of Aug. 23, which is not conducive to soybean crop development, an analyst said.
Although the USDA forecast 120.42 million mt production of US soybeans in 2020-21, up 26% year on year, the market is still uncertain.
If the dry weather continues unabated in the Midwest for the next three weeks, US soybean productivity could fall drastically, an analyst said. So the coming weeks are very crucial for US soybean farmers.
