Soy breaches $13 a bushel as strong demand outweighs labor deal

by Bloomberg Dec 30, 2020

Soybean futures broke above $13 a bushel for the first time since 2014 and wheat climbed to a six-year high on continued strong demand.

Soybeans rose 0.6% to $13.035 a bushel at 11:25 a.m. New York time, after slipping as much as 1.2% earlier after Argentine workers ended a labor strike that was holding up exports from the world’s largest shipper of soy products.

“Year-end brings in a bit of an erratic trade,” Tom Fritz, partner at Chicago-based EFG Group LLC, said by phone. Soymeal and oil also were mixed.

The Argentina labor strife that started earlier this month had boosted prices and delayed shipments of some agricultural products. It has now ended after an agreement that includes a 35% salary increase in 2020, though it will take weeks for shipments to catch up, according to The Hightower Report.

If Argentine output declines, buyers could turn to the U.S. for more supplies, further depleting ending inventories already seen as being tight, according to the report.

Wheat in Chicago rose as much as 3.9% to $6.4275 a bushel, the highest in six years. Corn rose for a 13th day, putting the futures on track to end the day with the longest winning streak since 1959, according to data compiled by Bloomberg.

Traders are “already anticipating a bullish report” on Jan. 12, when the U.S. Department of Agriculture issues its next global supply and demand outlook for the crop, Fritz said. “The higher the market goes the more buying it attracts.”

In soft commodities, cocoa for March delivery jumped as much as 4% in New York, the biggest intraday gain since Nov. 16. Raw sugar for March rose 2.2%, while arabica coffee and cotton also gained.