SOYB ETF

With a global focus on clean energy transition, the use of biofuels could be favorable for soybean prices. Some traders are already forecasting a bump in prices, but regulatory measures by the incoming U.S. presidential administration in 2025 could add to that momentum.

Brazil's decision to pump the brakes on soybean production could help the slide in prices, but according to a Reuters report, it may not produce the desired results for bullish soybean traders and investors. Soybean prices have fallen about 20% for the year despite harsh weather conditions and infestations adding pressure to Brazilian farmers.

Traders have been offloading Soybeans since November, peaking last week, as global stockpiles grow. As of Friday, traders had increased their bearish stance on CBOT (Chicago Board of Trade) soybean futures and options, reaching a new record net short position of 171,999 contracts, up from 160,653 the previous week.

The increased use of biofuels should generate bullish vibes for agricultural commodities investors. More recently, plans for a biofuel plant in California should help spur more investors to look at ag commodities more closely.

The global demand for alternative energy sources can help boost soybean prices in 2024, especially when it comes to increased use of soy-based biofuels. A recent Reuters report noted that U.S. farmers, in particular, could be planting more soybeans in the new year, which can help balance the effects of potentially more harsh weather.

Wheat futures headed lower Friday, set for their first daily loss in nine sessions, while soybean futures inched lower after a monthly supply and demand report from the U.S. Department of Agriculture. The government agency raised its forecast for global wheat production by about 1 million metric tons to 783.01 million for the 2023/2024 marketing year.

According to a Famer's Advance report, the next year should be challenging for the biggest players in the soybean market. Nonetheless, Brazil is forecast to come out on top when all is said and done.

Different parts of the world have been dealing with harsh weather challenges presented by El Niño this year. Nonetheless, soybean sales were still able to reach a yearly high while wheat stays afloat thanks to demand from China.

Soybean prices have been staying steady as the 2023 harvest starts coming to a close. Continued demand from China should help keep prices afloat, while Brazil prays for rain.