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Soybeans Surge to Two-Year High on Chinese Demand, Crop Rating

September 1, 2020 at 15:52 by Andrew Moran

Soybean futures are adding to their gains on Tuesday, lifting prices to their best levels in two years. The agricultural commodity is extending its winning streak to six sessions on strengthening Chinese demand and the US government reporting that conditions of the American crop are deteriorating. Could soybean prices test $10 later this year?

November soybean futures picked up $0.0175, or 0.18%, to $9.5525 per bushel at 15:36 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybean is trading at its best level since June 2018 as prices have been on an upward trajectory, recording an August boost of more than 8%. Year-to-date, soybean wiped out its losses, and it is up a tepid 0.05%.

According to the US Department of Agriculture’s (USDA) weekly crop progress report, 66% of soybeans were rated in good-to-excellent condition, down three percentage points from the previous week. The drop did meet market expectations. The USDA also reported that only 62% of the corn crop was rated in good-to-excellent condition.

Meanwhile, market observers are monitoring Chinese imports as a surge in corn and soybean exports contributed to the broader agricultural commodities rally in August.

Demand from the world’s second-largest economy continues to increase as the latest data point out that Beijing has ramped up its purchases of US farm goods to meet the provisions of the US-China phase one trade agreement. According to government figures, soybean sales for delivery in the 2020–2021 marketing season are already running at their highest levels in seven years

In other industry news, a new report from the International Grains Council (IGC) forecasts a record annual harvest for corn, soybeans, and wheat. IGC analysts anticipate global soybean production to advanced eight million tons higher to an all-time high of 373 million tons.

The rest of the US agricultural market is seeing green on Tuesday, buoyed by a weakening greenback that is testing its lowest level in more than two years. November wheat futures surged $0.15, or 2.72%, to $5.6725 per bushel. November corn futures added $0.0025, or 0.07%, to $3.58 a pound. November coffee futures picked up $0.0195, or 1.51%, to $1.31 per pound.

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