RIO DE JANEIRO, BRAZIL – Benchmark soybean futures traded in Chicago broke the $16/bushel mark for the first time since 2012 on Tuesday, May 11, as traders focused on tightening feed grain supplies and dry weather in Brazil’s corn-producing areas.
Corn and wheat futures also posted strong gains, with short term contracts leading the way. The weaker dollar provided support, making U.S. grains more competitive globally.
The July soybean contract closed up 27.25 cents at $16.1475 per bushel after reaching a contract peak of $16.2550, the highest for the most active contract since September 2012 on a continuous chart.
Corn for July advanced 10.50 cents to $7.2225 per bushel, trading slightly below the contract peak set last week. July wheat was up 11.25 cents at $7.4175/bushel.
Soybeans topped $16 amid concerns over dwindling feed grain supplies, including soybean meal and corn. The rally reflects dry weather in Brazil, which could affect the country’s corn production.
“The exports (of corn) that Brazil would be running in June, July and August are not going to happen. So everybody around the world who would like to import corn from Brazil will be forced to turn to the U.S.,” said Terry Roggensack, analyst at The Hightower Report.
The squeeze on corn supplies should also impact competing raw materials in the feed industry, including soybean meal. “The more corn goes up, the more valuable the meal becomes,” Roggensack said.