Chicago Board of Trade (CBOT) Soybean Futures reached their highest prices since June 2018 in its last trading session. This recent record high, is coming at a time grain traders predicted on the U.S. Department of Agric. Increasing its forecast for exports, following recent sales to the world’s highest consumer of soybeans (China).
CBOT Soybean Contract closed at $9.96 a bushel, after earlier rising to $9.98, the latest in a series of highs since June 2018.
CBOT Corn closed at $3.68 a bushel, after surging as high as $3.69.
Quick fact: Grain futures including Soybean, Corn Contracts, are created as standardized. These contracts are traded on an exchange, in which the buyer of the contract agrees to take delivery from the seller of the contract, at a predetermined price, and on a future delivery date agreed upon.
Most parts of the western world use grains as an energy substrate for livestock feed. In Nigeria and most parts of the world, grains are also consumed by humans, either by cooking or roasting.
Grains’ industrial uses include producing industrial alcohol, fuel ethanol, sweeteners, starch, and beverage.
The USDA lowered its estimate of 2020/21 U.S. ending stocks by 150 million bushels to 460 million bushels for soybeans, and by 253 million bushels to 2.503 billion bushels for corn.
“The trade believes that the yields are going to continue to fall,” said Don Roose, President of Iowa-based broker U.S. Commodities. “And you still have a buyer underneath the market: China.”
The USDA, in a monthly report, said U.S. corn and soybean production will be smaller than previously expected, because of dry weather and a severe windstorm that damaged crops across the key production state of Iowa.