November 23, 2020

US soybean futures highest since June 2016 due to supply issues and South America dry conditions

United States soybean futures surged for a sixth successive session to its highest in four years, driven by lower US supplies and dry conditions in South American crop areas, Reuters reported.

Corn futures also surged thanks to boosted exports and concerns about South America's dry conditions, but wheat closed mixed.

Michael Magdovitz, Rabobank commodity analyst, said there is currently a supply shortage concern in the market, especially in this period where Brazilian crop requires higher moisture.

More moisture is needed in Brazilian and Argentine grain belts to complete soybean and corn planting and increase crop development, even though it has seen some rain recently.

The Buenos Aires Grains Exchange said Argentine soy planting advanced thanks to rains over the past week in major drought affected areas, but most of the country is still under dry weather.

Brian Hoops, president of U.S. broker Midwest Market Solutions, said it is a worrying weather forecast for Argentina.

January soybean futures on the Chicago Board of Trade (CBOT) was 3-1/2 cents higher at US$11.81 per bushel, the highest since June 13, 2016.

CBOT December corn futures closed 3/4 cent higher at US$4.23-1/4 a bushel. March futures ended US$4.28-1/4, the highest since July 24, 2019.

-      Reuters