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Soybean futures hit two-year high after USDA data

  • Chicago soybean futures (S_1:COM) jumped to the highest since June 2018 as the U.S. Department of Agriculture reported lower estimates for domestic soybean production.
  • The most-active soybean contract settled $0.185 higher at $9.96/bushel after rising to $9.98, the latest in a series of highs since June 2018.
  • In its latest monthly report, the USDA said U.S. soybean and corn production will be smaller than previously forecast due to unfavorable weather last month, and traders expect inventory estimates may tighten due to even lower harvest forecasts and higher exports.
  • The USDA sees soybean production for the 2020-21 marketing year at 4.3B bushels, down 112M bushels from the previous forecast, with its yield forecast down 1.4 bushels per acre from the August forecast to 51.9 bushels per acre.
  • The USDA also forecasts U.S. exports of 2.125B bushels for 2020-21, up from 1.68B bushels in the previous marketing year, leading to "higher usage" and lower excess supply in the U.S., says Teucrium Trading's Sal Gilbertie.
  • "The trade believes that the yields are going to continue to fall," says Don Roose, president of Iowa-based broker U.S. Commodities. "And you still have a buyer underneath the market: China," which has been a big buyer of U.S. soybeans and corn.
  • CBOT corn (C_1:COM) rose $0.035 today to $3.685 per bushel after reaching its highest price since March 13 at $3.6925, but CBOT wheat (W_1:COM) bucked the trend and fell $0.0625 to $5.42.
  • ETFs: DBA, CORN, SOYB, WEAT, RJA, JJGTF, JJA, GRU, FUD

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