A lower dollar added to the crop’s substantial rally. Without a meaningful injection of new supply, how much larger can soybean prices go this year?
March soybean futures rose $0.185, or 1.33%, to $14.0625 per bushel at 14:12 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybean prices flatted last week, but they have still risen more further than 7% year-to-date.
As stated by the US Department of Agriculture (USDA), there will be cuts in ending stocks for soybeans, corn, and wheat. It also cut its corn and soybean harvest appearances for Argentina and Brazil. Overall, it was a piece of bullish news for the agricultural sector, red-hot over the last year.
Industry watchers are also urging that heavy rains will affect Brazil’s soybean harvest this month.
Since the rainfall can change the country’s truck-dependent soybean shipping, the 2020–2021 crop’s transportation could take a tremendous hit during February. But circumstances are projected to remain dry in most of Argentina for the next couple of days. However, some rains are being announced in the nation’s northern region.
Since global demand is predicted to extend, skyrocketing for the rest of 2021, foreign markets attempt to ease the situation. Indonesia, one of the world’s biggest soybean producers, will soon formally unveil a three-phase plan to assist reduce prices, including organizing soybeans as a strategic commodity that enables the government to place constraints on imports. As a consequence, the USDA is projecting the nation’s soybean output to rise to 470,000 tons.
The dollar is also encouraging soybean prices. The US Dollar Index (DXY), which gauges the dollar versus a basket of currencies, fell 0.38% to 90.59, from an opening of 90.91. A weaker dollar is beneficial for dollar-pegged commodities because it makes it more affordable for foreign investors to buy.
In other agricultural commodities, March corn futures totaled $0.04, or 0.71%, to $5.6776 per pound. March wheat futures hit up $0.0075, or 0.11%, to $6.56 a bushel. March coffee futures sank $0.006, or 0.48%, to $1.235 per pound.