Baxia Markets
June 16, 2021

Soybean In Trouble?

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Soybean futures might see a price increase due to crop conditions.

The portion of the corn crop rated as good or excellent dropped by nearly 14% in Iowa due to bad weather conditions. As the No.1 corn state, this might create a supply and demand imbalance for the entire country. Combined with Illinois, the leader in soybeans' production, the two states produce 31% of the entire nation's crop supply. 





With the unusual heat attacking multiple crops producing states, the imbalance is only getting more severe. Iowa, for example, is nearly 60% in drought with a 20-point increase in 1 week. Weather in mid and late summer usually determines the crop size, directly affecting the crop outputs. 

Although we are not there yet, the early drought is sure to have some lingering effect. Crops like corn and soybean have fairly stable demand. Multiple industries use them as raw materials for their products. Hence, a hit in the supply side will likely affect the commodity market by a considerable margin.


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