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Soybeans Add to Gains on Crop Quality, Trump’s $12 Billion Bailout

July 31, 2018 at 14:24 by Andrew Moran

Soybean futures are adding to their gains on Tuesday after the US government gave the thumbs up to domestic crop quality. Soybeans are also continuing their momentum from President Donald Trump’s $12 billion bailout of the nation’s farmers, though many farmers say they would prefer to access foreign markets rather than receive a handout.

November soybean futures advanced $0.245, or 2.75%, to $9.155 per bushel at 14:00 GMT on Tuesday on the Chicago Board of Trade (CBoT). Despite its 12% loss over the last three months, soybean prices have surged close to 6% in July.

According to the US Department of Agriculture (USDA), 70% of the soybean crop was rated good-to-excellent and 72% of the corn crop was rated good-to-excellent. For the second consecutive week, analysts had expected the US government to slash its corn and soybean crop quality ratings.

Right now, 86% of the soybean crop is blooming, up from 78% a week ago. It is also up from 80% at the same time a year ago and above the five-year average of 77%.

Last week, the White House announced a $12 billion bailout package for US farmers impacted by the trade war with China, the European Union (EU), and Canada. Under the aid initiative, there will be two commodity support programs and the USDA will be ordered to stabilize the domestic agriculture market. The move was cheered on by investors, but farmers are not that happy, say industry experts and public officials.

Representative David Young (R-IW) told CNN on Thursday that he opposes the whole thing:

I’m not for bailouts. I’m not happy about that. And a lot of farmers aren’t as well. It’s an admonition that tariffs are harming agriculture and harming farmers.

Senator Ron Johnson (R-WI) compared the aid package to a “Soviet-type of economy”:

This is becoming more and more like a Soviet-type of economy here: Commissars deciding who’s going to be granted waivers, commissars in the administration figuring out how they’re going to sprinkle around benefits.

Time and time again I’ve heard from farmers that they want trade, not aid. Instead of throwing money at a problem we’ve helped create, the better option is to take action to make it easier for our farmers — and manufacturers — to sell their goods at fair prices to consumers around the world.

In other agricultural commodities, December corn futures climbed $0.0575, or 1.51%, to $3.865 a pound. September wheat futures surged $0.115, or 2.1%, to $5.58 per bushel. September orange juice futures dipped $0.0125, or 0.74%, to $1.678 per pound. September coffee futures slid $0.0125, or 1.12%, to $1.101 a pound.

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