Chicago | Reuters — U.S. soybean futures rose on Wednesday as the market rebounded from its lowest level in nearly a month amid lingering concerns about risks from unfavourable crop weather in South America.
Corn and wheat futures hit their lowest levels in more than two weeks under pressure from large supplies and technical selling. Markets also were consolidating ahead of the Christmas weekend.
Soybean traders kept an eye on South America’s weather after dry conditions in Argentina, a major exporter, raised concerns about crop plantings and boosted prices earlier this month.
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On Tuesday, expectations for rains in dry areas of Argentina weighed on prices. The improved conditions coincided with forecasts for a record soy harvest in fellow exporter Brazil.
The price drop left the soybean market “a bit oversold,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa. Traders were still watching “a forecast calling for drier conditions in Brazil and that could be a factor next week,” he added.
Crop losses in Argentina or Brazil could increase demand for U.S. soybeans, as the countries compete for sales on the global export market.
On Wednesday, the U.S. Department of Agriculture said exporters had struck deals to sell 132,000 tonnes of U.S. soybeans to China, the world’s top soybean importer. U.S. exports will likely stay at a “brisk level” due to strong demand from China, said Matt Ammermann, vice-president for Eastern Europe and the Black Sea Region for broker INTL FCStone.
“Despite rain forecasts in Argentina, the outlook there in January is still looking rather dry at a critical time for soybean crop development in South America,” he said.
Most-active Chicago Board of Trade March soybeans rose 1-1/4 cents to $10.17 a bushel after hitting their lowest price since Nov. 21 on Tuesday (all figures US$).
Most-active March wheat lost 3-3/4 cents to $3.99-1/2 a bushel, its lowest price since Dec. 2 and below the closely watched $4 level. Most-active March corn fell three cents to $3.47-1/4 a bushel and traded to its lowest price since Dec. 2.
Wheat prices remain burdened by huge global inventories and U.S. exporters face stiff competition from other countries, traders said.
“Is it cheap? Yeah. But we’re not winning a lot of business,” said Jim Gerlach, president of A/C Trading in Indiana, referring to U.S. wheat.
On Tuesday, Egypt, the world’s biggest wheat importer, bought 360,000 tonnes of wheat from Russia, Argentina and Romania in a tender and none from the U.S.
— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Colin Packham in Sydney.
