Walt Breitinger

Walt Breitinger

Super-hot soybeans continued their explosion, topping $13 per bushel for the first time since August of 2014. Despite the settlement of the Argentine shippers’ strike, which had been the reason for price strength, investors and funds continued chasing prices higher as if there’s no end in sight. The strike left more than 150 ships stranded, and Argentina could not export beans to hungry buyers throughout the world. Hot, dry weather in South America is again the focus, while North America, Europe and China watch that threat to re-stocking their low inventories.

Corn also registered the highest price since June of 2014, and wheat was at its highest since January of 2015. As of noon, on the last day of the year, March beans traded at $13.12, bringing them up $4.45 per bushel compared to Dec. 31, 2019. March corn traded at $4.84, so it’s up by $1 this year, and March Chicago wheat fetched $6.39, 80 cents higher.

Farmland Values Jump, Especially in the “I” States

Several factors converge to increase the value of farm real estate, including government payments to farmers, demand for land, and favorable interest rates, which are, in part, in response to covid-19. According to the USDA, farmland values have been steadily on the rise since the early 1990s, except for only two years, one of which was in 2008 during the recession.

Naturally, there is some land price variance by region and even by county, but heartland states are seeing some of the higher numbers. Iowa State University estimates roughly 30% of the cost of growing a bushel of corn can be attributed to land cost, which is more than seed, machinery, fertilizer, labor, all other costs.

Sugar Shoots Up, But Babies Should Abstain

The USDA published its new dietary guidelines this week. They recommend keeping sugar limited to 10% of daily calories from added sugars for adults and cutting it out entirely for children under two years of age. However, these guidelines haven’t slowed the demand for sugar, which may see its biggest yearly gain in four years. Covid-19’s far-reaching impact has affected this commodity, too, as more people globally have been staying home and baking.

The raw sugar traded on the futures exchange can come from sugar beets or cane and can be used both as a source of fuel alcohol and as the basis for refined sugars used in cooking. March sugar closed at 15.50 cents per pound, raising it by two cents per pound this year.

Opinions are solely the writer’s. Walt Breitinger is a commodity futures broker with Paragon Investments in Silver Lake, KS. He can be reached at (800) 411-3888 or www.paragoninvestments.com. This is not a solicitation of any order to buy or sell any market.

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