Soybean prices at the Chicago Stock Exchange have soared since the beginning of August. Since then, they have risen 20 per cent to the equivalent of EUR 325 per tonne. This is the highest level since May 2018. The driving factor in the past two and a half months has been dry sowing conditions in Brazil. This situation could delay sowings and also harvests – to the extent buoyant demand from China for US beans. This shows, on the one hand, how large China’s soybean demand is and, and on the other, how limited supply from other countries of origin is. South American soy supply from the 2019/20 crop is used up. For this reason, China has repeatedly ordered large amounts from the US since mid August. New-crop soybeans will not come off the field in Brazil and Argentina until spring 2021. Another factor is also likely to propel the trade between China and the US. The two great powers are in the first phase of the current trade agreement in which China has pledged to purchase a total of USD 36.5 billion worth of agricultural feedstock from the US in the 2020/21 crop year.

Another factor pushing up soy prices in the past two weeks has been dry sowing conditions in Brazil. This situation could delay sowings and also harvests to the extent that the crop would be available on the global market later than usual. However, soybean prices could come under pressure in the coming weeks as the US harvest proceeds. So far, the harvest has progressed much more quickly than the 5-year average.