Soybean futures are trading at their best levels in two years as the agricultural commodity looks to test $11. With the US government slashing its supply forecasts and the greenback weakening, soybean prices are extending their winning streak this week. Soybeans are joining the broader rally in agricultural commodities in the middle of the trading week.
November soybean futures advanced $0.125, or 1.2%, to $10.565 per bushel at 17:27 GMT on Wednesday on the Chicago Board of Trade (CBoT). Soybeans prices are at their highest levels since August 2018. Year-to-date, soybean is up more than 10%.
In recent days, Brazil has been witnessing rainfall, but the weather conditions might not be enough for the country’s 2020-2021 soy planting cycle. While the South American nation just came off a record harvest, patchy rains may not be insufficient to support the nation’s commodities sector.
In the world’s second-largest soybean market, the US, the harvest is coming along nicely and the conditions are in great condition. According to the US Department of the Agriculture (USDA), the domestic soybean crop was 61% harvested, which is above the five-year average of 32%. It is also higher than the market estimate of 59%. Also, 63% of soybeans were rated in good-to-excellent condition.
For corn crops, 41% of the harvest was complete and 61% were rated in good-to-excellent condition.
Meanwhile, in a separate National Oilseed Processors Association (NOPA) report, US soybean crushings are anticipated to come in at their lowest monthly level in a year.
Soybean prices might find additional support on a potential work stoppage in Argentina, another key market for the industry. Argentina’s Federation of Oilseeds Workers initiated an open-ended wage strike on Tuesday, and the latest reports indicate that the government has not intervened in negotiations that would require workers to return to the fields while contract talks are taking place.
Weakness in the greenback is aiding the overall commodities market. The US Dollar Index, which measures the greenback against a basket of currencies, tumbled 0.18% to 93.36, from an opening of 93.54. 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 added $0.0475, or 1.21%, to $3.96 per pound. November wheat futures picked up $0.0275, or 0.46%, to $5.9675 a bushel. December coffee futures edged up $0.004, or 0.36%, to $1.10 per pound.