Bigs Gains for Soybeans but Corn Too

Sep 18, 2020

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The gains in soybeans have garnered most of the attention and headlines, but corn futures have performed strongly over past the month and half as well.
From the closing price on the first trading day of August to the closing price on Thursday (Sept. 17), the November soybean contract has jumped slightly more than $1.32/bu or almost 15% - buoyed mainly by strong export demand from China but also declining US production prospects in the wake of drought and dryness in the western Corn Belt (see chart below).
Over the same period, meanwhile, December corn rose to $3.75 ¼ from $3.28 ½, an increase of almost 47 cents or just over 14% (see chart below).
December Chicago wheat moved higher as well, although the gains were much more modest, up 27 cents or about 5% to the Thursday closing price of $5.56 ¼.
All three markets were trading again near the noon hour on Friday.
The gains in soybeans have pushed that market to its highest since June 2018, while the advances in corn have that market trading at its highest since early March 2020.
According to the USDA, American exporters sold nearly 2.7 million tonnes of U.S. soybeans in the first half of this month alone for delivery to China. Another private export sale to China was announced by the USDA this morning, the 11th straight day such as sale has been reported. Corn has also been strengthening amid export demand to China, with some reports suggesting this week that high winds and heavy storms may have reduced the Chinese corn crop by as much as 4% or 10 million tonnes.
At least some of the corn and soybean demand to China has been linked to the need for livestock feed as that country begins rebuilding its hog herd from the devastation caused by African Swine Fever.
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