MarketsFarm — Commodities on the Chicago Board of Trade (CBOT) have appreciated a significant rally over the past weeks.

Last week’s world agriculture supply and demand estimates (WASDE) from the U.S. Department of Agriculture (USDA) detailed lower-than-expected ending stocks for soybeans, which were bullish for soybean values.

“Beans are on a mission right now,” said Scott Capinegro of Barrington Commodities in Barrington, Ill., noting soybean contracts have gained 40 cents on the week.

Capinegro noted farmer selling was not putting an pressure on soybean prices as most farmers had sold already.

Soyoil contracts are hovering around four-year highs, with some market participants expecting soybeans to hit 2016 highs of $12.08 per bushel (all figures US$).

Rumours that Brazil has already sold a significant portion of its 2020-21 crop have given global soybean prices a boost, as prolonged dryness in key growing regions has hampered planting progress.

Corn markets have also been stronger, following soybeans. Capinegro expected the March corn contract to add another 10 to 14 cents, closing around $4.44 per bushel.

However, there are concerns that a second COVID-19 lockdown in the U.S. would hamper demand for ethanol, which could limit the upside for corn prices.

With president-elect Joe Biden taking office in January, a year after the initial Phase One trade deal between the U.S. and China, trade agreements between the two countries may be revisited.

“Is Biden going to loosen restrictions on China? Will China loosen restrictions on us?” Capinegro wondered.

Private firms anticipate a decline in the U.S. dollar in 2021, “which is also bullish for commodities.”

— Marlo Glass reports for MarketsFarm from Winnipeg.