CBOT weekly outlook: $12 soybeans possible

Detail from the front of the CBOT building in Chicago. (Vito Palmisano/iStock/Getty Images)

MarketsFarm — There’s a good chance that soybeans on the Chicago Board of Trade (CBOT) could reach US$12 per bushel before the end of December, according to grains analyst Terry Reilly of Futures International in Chicago.

“It’s very possible. We’re not too far away from it. We also got close to that point back on Nov. 30,” he said.

Should dry conditions persist in South America, posing a threat to the continent’s soybean crops, and if demand for U.S. soybeans picks up, that could push up prices, he said.

“If Argentina also continues to see strike problems limiting the amount of soymeal and soyoil available for export, the [CBOT] product prices may support soybeans to get above $12/bu.,” he added (all figures US$).

Grain inspectors and oilseed workers remain on strike in Argentina, which has impeded the country’s ability to keep up its meal and oil exports. The strikers have been demanding pay increases due to the COVID-19 pandemic and because inflation is rising in Argentina, according to reports.

Soybean exports out of the U.S. at this point in the 2020-21 marketing year are about 32.08 million tonnes — nearly 72 per cent ahead of last year’s pace, according to the U.S. Department of Agriculture (USDA) export inspections report issued Monday.

Reilly said CBOT soybeans will likely trade in the $11.75/bu. range, pushing as high as $12.05.

The January contract for Chicago soybeans on Wednesday touched a high of $11.95/bu. before closing at $11.8375.

The rise in soybean prices has spilled over into corn values as well, seeing them increase, he said.

With Russia planning to enact an export tax on wheat of more than US$30 per tonne, Reilly said, Russian wheat exporters have become more aggressive.

“They’re trying to get as much wheat sold and exported before that Feb. 15 date kicks in,” he stated,

That aggressiveness has resulted in U.S. wheat prices pulling back, but Reilly cautioned there likely won’t be any dramatic price increases in North America once Russia’s tax is in place. He expects exports out of Ukraine, the European Union and Australia to pick up instead.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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