Mexico City | Reuters — Chicago soybean futures settled higher on Tuesday after the U.S. government slashed its estimate for production in Argentina to a 23-year low in a monthly report.
Soybean production in Argentina will be smaller than previously thought at 27 million tonnes as a crop-wasting drought decimated fields in the key South American producer, according to the U.S. Department of Agriculture.
“They did make a bigger cut than expected to Argentina soybeans, but I think that is probably more in line with where the market may have thought it is going, especially how aggressive the Argentine exchanges have been,” said Craig Turner of Daniels Trading.
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Argentina’s corn crop was pegged at 37 million tonnes.
Argentina has endured severe drought while rival corn and soy exporter Brazil has seen more favourable conditions.
The most-active soybean contract on the Chicago Board of Trade (CBOT) settled up 10 cents at $14.97-1/4 per bushel, after reaching a high of $15.07-1/2 earlier in the session (all figures US$).
CBOT corn closed three cents lower at $6.51 per bushel and wheat settled down 4-1/2 cents at $6.74 per bushel.
In the U.S., traders have been grappling with contrasting weather, with early spring planting slowed by damp, cold conditions and some winter wheat crops strained by drought.
“I think we’re going to quickly go back to trading North and South American weather at this point,” said Terry Reilly, a senior analyst at Futures International.
No ships were inspected on Tuesday under the Ukraine Black Sea grain deal “as the parties needed more time to reach an agreement on operational priorities,” the United Nations said, adding that routine inspections were due to resume on Wednesday.
USDA raised its export estimates for corn and wheat from Ukraine slightly, however.
“Any time Russia says something about the grain deal that’s bullish for grains, there’s a market opportunity to take. But no matter what, they want to export that grain,” said Mark Gold of U.S. consultancy Top Third Ag Marketing.
— Reporting for Reuters by Cassandra Garrison in Mexico City, P.J. Huffstutter and Karl Plume in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.
