Soybean futures sold for around $11.69 per bushel on the Chicago Board of Trade yesterday, breaching a four-year high earlier this month.
By comparison, CBoT soybean futures were trading around $9.40 per bushel when the U.S.-China Phase 1 trade deal was signed in mid-January.
Moe Agostino, the chief commodity strategist with Farms.com Risk Management, said, “no one in the US thought we could even get to $10/bu, and now here we are (almost at $12/bu).”
Agostino said bullish price action had been the result of two factors: increased trade and weather events.
“It started with better-than-expected demand, particularly from China as they bought soybeans because they needed them as part of the Phase 1 trade deal,” he said.
Farms.com’s Diego Flammini said China, to date, had purchased a total of $23.6 billion in US farm products, or about 71% of its agriculture commitments specified in the trade deal.
Soybean prices hold near $12 per bushel, which was also driven by adverse weather (storms and drought) in both the US and South America. This month, Brazil suspended tariffs on soybean imports from outside the country to ensure its domestic supplies were stable following strong demand.
Agostino said if South America doesn’t receive adequate growing weather, it could mean prices move even higher…
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