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Soybeans Rally 3% Amid Unchanged Crop Ratings, Higher Foreign Demand

October 6, 2020 at 16:12 by Andrew Moran

Soybean futures are rallying as much as 3% on Tuesday as US government crop ratings were unchanged and foreign demand remained strong. After experiencing some weakness to finish September and slipping below $10, the agricultural commodity has recovered and retested a 28-month high.

November soybean futures surged $0.275, or 2.69%, to $10.49 per bushel at 15:55 GMT on Tuesday on the Chicago Board of Trade (CBoT). Although the crop experienced a drop to close out September, it is coming off a monthly gain of more than 3%. Year-to-date, soybean prices are up 10%.

According to the US Department of Agriculture’s (USDA) weekly crop report, 61% of soybeans were in good-to-excellent condition, unchanged from last week. The soybean harvest was 38% complete. Sixty-one percent of the corn crop was rated in good-to-excellent condition, with 25% of the harvest complete.

In a separate report, the USDA stated that weekly export inspections reached 1.667 million tons, beating market forecasts of as much as 1.55 million tons.

The agricultural department noted that private exporters confirmed the export sales of 154,400 metric tons of soybeans for delivery to unknown destinations during the 2020–2021 marketing season.

In other industry news, Brazilian soybean planting has been advancing at a sluggish pace, primarily due to dry weather conditions across most of the South American country. According to AgRural data, soybean farmers have planted only 1.6% of the total estimated, down from 3.1% at the same time a year ago.

While soybean plantings began early last month, many farmers have been waiting for ample rainfall this month to initiate the process. Still, Brazil is projected to produce more than 133 million metric tons of soybean this marketing year, a record high for the world’s largest soybean producer and exporter.

Soybean prices are looking to benefit from a weaker US dollar. Despite the greenback’s ascent last month, the greenback has slumped about 0.5% over the last week. The US Dollar Index, which measures the dollar against a basket of currencies, fell 0.03% to 93.44. A lower buck is good for commodities priced in dollars because it makes it cheaper for foreign investors to purchase.

In other agricultural markets, November corn futures picked up $0.075, or 2.04%, to $3.8725 per pound. November wheat futures advanced $0.095, or 1.63%, to $5.9375 a bushel. December coffee futures edged up $0.005, or 0.47%, to $1.077 per pound.

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