Chicago | Reuters –– U.S. soybean futures rose on Monday as concerns re-emerged that drought conditions in Brazil are having a detrimental effect on crops in the top-producing nation and after the U.S. government announced another export sale.
Wheat futures plummeted after rallying last week to four-month highs, while corn was pressured by spillover weakness from wheat.
Chicago Board of Trade most-active soybeans Sv1 rose 2.5 per cent to $13.36 a bushel – its highest close in December – on weather forecasts that show the northern half of Brazil may still not be getting enough rain to offset drought conditions that are threatening crops. The nation is still on pace to produce its largest crop ever, according to analysts and the U.S. government.
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Brazil’s 2023/24 soybean planting had reached 91 per cent of the expected area as of Thursday, consultancy AgRural said, compared to 95 per cent a year earlier.
“We have some potential real problems with the Brazilian crop at this juncture,” said Dale Durchholz, commodity analyst at Grain Cycles. “I think the strength in the beans is coming from there.”
Soybeans were also supported by the U.S. Department of Agriculture confirming private sales of 132,000 metric tons of U.S. soybeans for delivery to unknown destinations in the 2023/24 marketing year that began Sept. 1.
CBOT most-active wheat Wv1 settled down 3.5 per cent, or 22-1/4 cents, at $6.09-1/2 per bushel after climbing nearly 5 per cent last week and hitting highs not seen since August. Corn Cv1 followed, declining 0.8 per cent, or 4 cents, to $4.81-1/2 a bushel.
Speculators and funds hold a historically heavy net short position in wheat and have not shown signs of major purchases to exit the positions, traders said. Commodity funds were net sellers of CBOT wheat on Monday.
Also putting pressure on wheat was the possibility that hefty sales of U.S. wheat to China last week will not continue this week, analysts said.
–Additional reporting by Michael Hogan in Hamburg and Peter Hobson in Canberra.
