Soybean soars to 6-month high on China opening, Argentina dryness

SOYBEAN futures jumped to the highest in six months on expectations for greater demand from China and as dry conditions in parts of South America threaten supply. Winter wheat extended gains amid concerns of potential crop damage caused by freezing weather in the US.

China, the world’s largest soybean buyer, is moving to unwind coronavirus measures on travellers from early January, putting it on track to emerge from three years of self-imposed global isolation. That’s set to buoy demand for crops.

Meanwhile, increasing drought stress is rebuilding across most of Argentina’s corn and soy growing areas. Only limited rainfall is expected this week, according to a Maxar Technologies report.

“Recent rains in Argentina seem to have spared part of the production areas, leading to fears” of drought stress that could affect yields, Paris-based adviser Agritel said in a note. Soybean futures rose 1.85 per cent to US$15.165 a bushel in Chicago, the highest since June. Corn also jumped to the highest level in nearly two months on demand optimism.

Hard red winter wheat advanced for the sixth straight session on its longest winning streak since mid-May when prices of the grain reached an all-time high amid supply disruptions from the war in Ukraine.

While the severe US cold is easing, with above normal temperatures expected in the next 15 days, recent winter kill caused “significant damage” to wheat across the central Plains and west central Midwest, said Donald Keeney, senior meteorologist at Maxar. BLOOMBERG