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Soybeans Jump to Two-Week High on Growing US Foreign Export Demand

July 20, 2020 at 13:30 by Andrew Moran

Soybean futures are trading at their best levels in more than ten days, driven primarily by ballooning US foreign export demand. China has renewed its appetite for soybeans in the aftermath of the coronavirus pandemic, looking to restock its inventories and meet the growing domestic feed demand. But Brazil continues to be an attractive option for importers due to its ample supplies and a deteriorating real.

November soybean futures rose $0.03, or 0.34%, to $8.98 per bushel at 13:11 GMT on Monday on the Chicago Board of Trade (CBoT). August contracts have already tested the $9 mark, but the most active traded contract – November – is looking to top the key threshold. Last week, soybean jumped nearly 3%, paring its year-to-date loss to a little more than 6%.

According to the US Department of Agriculture (USDA), there were sales of 126,000 tons of US soybeans to unknown destinations, lifting the weekly total to 1.5 million tons. The USDA confirmed that approximately one million tons of soybeans were sold to China, a top consumer that has engaged in a flurry of activity in recent weeks.

Meanwhile, the National Oilseed Processors Association (NOPA) reported that soyoil supplies among its US members declined more than expected last month. In June, domestic stockpiles stood at 1.778 billion pounds, down from 1.88 billion in the previous month.

In a separate USDA report, Brazil is forecast to ship a record amount of soybeans in the 2020–2021 marketing season due to its immense inventories and favorable exchange rate. The USDA projected that exports would top 84 million metric tons, while the output would reach 130 million metric tons. Because the Brazilian real has been the worst-performing currency in 2020, the South American country has become an attractive commodities market this year. Beijing is still expected to be its top customer.

Money managers and investors cut their long positions and increased their short positions in soybeans in the week ending July 14, notes the Commodity Futures Trading Commission (CFTC).

In other agricultural commodities, August corn futures slipped $0.0225, or 0.68%, to $3.3075 per pound. September wheat futures declined $0.0625, or 1.17%, to $5.285 per bushel. September coffee futures dropped $0.006, or 0.59%, to $1.017 a pound.

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