Soybean Reaches 2018 Highs, Wheat Awaits Heavy Rains

Soybean demand rose for its 11th straight week on Tuesday to its highest since June 2018. Meanwhile, other agricultural commodities are anticipating heavy rains in coming months.

Chicago Board of Trade added $9.74-3/4 a bushel earlier after touching a $9.77 high last seen in June 2018.

Private exporters for the US commodity sold 318,000 tons to China and 175,000 tons of soymeal to the Philippines. According to the US department of Agriculture (USDA), these orders are for delivery for 2020/21 marketing year.

Commodity news anticipates an announcement from the USDA about their forecasts on supply and demand for the commodity. On September 11, the organization will confirm how crops had suffered in the summer, including the August windstorm in Iowa.

What Contributed to the Boost?

China’s soybean imports fell in August against the previous month amid falling shipments from South America, particularly from Brazil. The commodity’s demand was driven by fears from its largest importer, China, over fears that it will experience overwhelming floods. 

University of Illinois agricultural economist Todd Hubbs confirmed that skepticism revolving around production levels also supported the increase. His crop forecast for the commodity stands at 4.425 million bushels, 873 million above last year.

The main concern now lies with the fact that its acreage accounted for less than its usual annual amount. Instead of seeing approximately 95% to 97% of planted acreage, the figure came in at 90.6% for 2020.

The Farm Service Agency plans to hold another report on September 11 about how the pandemic impacted soybean output. If the number continues to reduce, then prices are bound to reach another high soon.

As a starting point, Hubbs pointed out that the potential for soybean exports have been expanding dramatically above previous forecasts. Competition in South Africa is beginning to surge, such as those in Brazil and Argentina. 

Wheat on Australian Backburners

Down under, Australia raised its forecast in wheat production during the 2020/21 season by nearly 12 percent. The world’s fourth-largest exporter of the commodity might witness a surge in output from heavy rains in its east coast.

According to the Australian Bureau of Agricultural and Resource Economics and Sciences, wheat production saw better output this year. For its year ending June 30, 2021, the figure totaled 28.0 million tons, 2.2 million more than its June estimate. 

Meanwhile, Ukraine reported an export of 8.29 million tons of grain for July-June season of 2020/21. Its loss was the opposite of what Australia gained: 2 million less tons than 10.09 million in an annual comparison.