Soybeans traded at the highest level in more than 6 years as increasing demand from top importer China and dry weather in the major producing areas of South America spur growing concerns over global supplies. Prices have climbed more than 40% since March after China started snapping up cargoes to feed a massive increase in hog numbers as the country recovers from African swine fever. Now the development of southern hemisphere crops in Brazil and Argentina has been threatened for weeks by lack of rain. Brazil is the biggest grower of soybeans and Argentina the top exporter of soybean oil.

International 6-year soy prices

Source: Bloomberg

Imports by China may reach 100 million tons next year and grow 3 to 4% annually over the next decade, according to the US Soybean Export Council. The US and Brazil have already sold a large part of their crops for shipment in coming months. Meanwhile, a stronger Chinese currency and a weaker dollar are only increasing the appeal of farm imports for the Asian country.

Corn has also been rallying on expectations for record Chinese imports and because of the dry weather in South America, but there are concerns over the impact of the latest US lockdowns on demand for corn ethanol.