Chicago | Reuters — U.S. soybean futures prices rose to the highest level in more than two months on Tuesday, adding to gains from the previous session when Chinese purchases and a lower-than-expected estimate of U.S. stockpiles buoyed prices.
Corn also advanced after rallying four per cent on Monday as a quarterly U.S. Department of Agriculture (USDA) grain stocks report pegged corn and soy inventories below traders’ expectations.
The inventory estimates heightened concerns about supplies and questions over whether the USDA may be overstating the size of the upcoming autumn harvests. Traders are uncertain about the crops after historic flooding delayed plantings in the spring and as harvests are off to a slower than normal start.
Most actively traded soybean futures on the Chicago Board of Trade climbed 1.4 per cent to $9.19-1/2 a bushel and reached their highest price since July 22 (all figures US$). Most-active corn futures edged up 0.8 per cent to close at $3.92-1/2 and reached the highest since Aug. 12. CBOT wheat futures rose 0.3 per cent to $4.98-3/4 a bushel on spillover support from the gains in corn.
“A lot of it is follow-through from yesterday,” said Brian Hoops, president of U.S. broker Midwest Market Solutions.
Chinese firms bought up to 600,000 tonnes of U.S. soybeans on Monday as part of a tariff-free quota allotted to the importers to buy up to two million tonnes this week, two sources with knowledge of the deals said.
Traders hope the sales lead to Chinese firms buying more U.S. soybeans over the longer term, Hoops said, after China slashed imports during the ongoing U.S.-China trade war.
On Wednesday, grain traders will look for the results of an Egyptian tender to buy an unspecified amount of wheat for shipment from Nov. 5-15 and/or Nov. 15-25. In its most recent wheat tender on Sept. 25, Egypt’s General Authority for Supply Commodities (GASC) bought 240,000 tonnes of Russian wheat and 60,000 tonnes of French wheat for shipment Oct. 26-Nov. 5.
Global wheat supplies are ample, and the U.S. faces intense competition for sales on the global market.
“Wheat must prove export demand will offset a larger crop than last year, which won’t be easy,” Bryce Knorr, senior grain market analyst for Farm Futures, said in a note.
— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.