Soybeans Extend Modest Gains on US Export Sales

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Soybean futures are extending their modest gains on Tuesday as rising US export sales have eased concerns over record harvests in key markets. Crop prices have been trading relatively flat over the last month as investors weigh US-China relations, foreign demand, and a slumping US dollar. Many experts are projecting big gains for US soybeans over the next 12 months, but if 2020 is any indicator, anything can happen.

November soybean futures rose $0.0125, or 0.14%, to $8.745 per bushel at 16:03 GMT on Tuesday on the New York Mercantile Exchange. Soybean prices have slumped in recent sessions, sliding close to 1%. Year-to-date, the agricultural commodity is down more than 8.5%.

According to the US Department of Agriculture (USDA), exporters reported sales of 699,000 tons of soybeans, with 588,000 headed for China. Despite Beijing falling short of the provisions inside the phase one trade agreement, China has been acquiring millions of tons of soybeans from the US, as well as Brazil amid weaker currencies.

In a separate weekly USDA report, 74% of American soybeans were rated in good-to-excellent condition, beating the market forecast of 1%. Also, 71% of the corn crop was rated in good-to-excellent condition.

Bloomberg recently compiled data that compares the price of Brazilian and American soybeans. It found that the spread is widening, making US crops more attractive. Experts point to two important factors: Chinese leadership trying to satisfy the White House by meeting the elements of the phase deal and taking advantage of a US dollar that has plummeted nearly 7% over the last three to four months.

Moreover, the South American country cannot grow enough soybeans to satisfy Chinese demand. Put simply, Brazil is running short of soybeans, despite its ballooning harvest. Still, Rio De Janeiro is expected to harvest 121 million tons of the crop this year.

All eyes will be on the World Agricultural Supply and Demand Estimate to determine if supplies will overwhelm demand.

The US Dollar Index, which gauges the greenback against a basket of currencies, dipped 0.07% to 93.52, from an opening of 93.60. A lower buck is good for commodities priced in dollars because it makes it cheaper for foreign investors to purchase.

In other agricultural markets, September corn futures picked up $0.01, or 0.32%, to $3.115 per pound. September wheat futures tacked on $0.065, or 1.32%, to $4.975 a bushel. November coffee futures fell $0.013, or 1.15%, to $1.113 per pound.

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