Soybean futures continued their impressive run on Monday with March futures up 28 ¼ to 1581 ¾. That contract has gained over 90 cents in the past 5 days. Market analysts agree that the focus is on South American weather and how that will impact production.
“A portion of especially southern Brazil and northern Argentina have been abnormally dry. That is something that typically happens during a La Niña season like we’re having here,” says Mike Hogan, Grain Origination Manager for Consolidated Grain and Barge, or CGB, a sister company to AgriFinancial. Recent forecast models for Argentina suggest it will remain dry.
Corn futures got a boost on Monday from that dry forecast as well, up over 14 cents on the March. Hogan says Argentina and Brazil are right in the middle of their growing season, think mid-to-late July here in the US.
“But there’s definitely been some crop damage that has been done. It’ll probably more affect the corn than it will the soybeans at this point. As we know, usually August for us is when that soybean crop is really made. They’re just starting to enter that window of when the soybeans are kind of in that make-or-break stage.”
China appears to be concerned about a short South American soybean crop. USDA has reported recent purchases of US soybeans from China and “Unknown Destinations”, which analysts believe to also be China. HAT market analyst John Zanker from Risk Management Commodities says Chinese buying of US soybeans is typically wrapped up by this time of year.
USDA will update their world supply and demand estimates at noon ET on Wednesday.
You can hear market analysis each weekday in the Hoosier Ag Today podcast on Podbean.