MarketsFarm — While Chicago wheat is hitting new contract highs, soybeans are the standout commodity on the Chicago Board of Trade (CBOT), according to one trader.
Over the weekend, there were rumblings that China had purchased five cargoes worth of soybeans earlier in the week. Three nights later, that number had grown, which caused soybean prices to rally.
“Last night, that number had gone from five cargoes to 15 to 20 to as much as 35 cargoes of beans,” said Ryan Ettner, a trader for Allendale Inc. at McHenry, Ill. “Basically, the talk of how much China had bought last week had increased significantly.”
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Ettner added that it would take another two weeks to receive confirmation from U.S. Department of Agriculture (USDA) reports how much soybeans China had actually bought.
The January soybean contract hit $12.8925 per bushel on Wednesday, reaching levels which haven’t been seen since Sept. 30 (all figures US$).
“(Thursday’s USDA) weekly export report should be strong, and if it’s not, we’ll start giving back from these highs immediately. But it probably will be (strong),” Ettner said.
Rumours surrounding soybeans have taken some of the focus away from the continuous rise of the December Chicago wheat contract, which hit a new high of $8.35/bu. on Wednesday, increasing in price by $1/bu. over the past month.
Ettner believes an influx of speculative funds in the contract is causing the rally.
“Anytime speculators are running a market, you always expect more support in Chicago wheat. There are far more speculators in Chicago wheat than there are in (Kansas City) and Minneapolis wheat (contracts),” he said.
“If funds are trading grain, they will trade three or four times as much Chicago wheat than any other wheat.”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
