Friday, 28 August 2015 03:32
CHICAGO: Benchmark US soybean futures rose 1.5 percent on Thursday as equity markets stabilized in China, the world’s top soy buyer, and on outlooks for dry weather as the US Midwest growing season winds down, traders said.
Corn clung to modest gains on better-than-expected weekly US export sales and spillover strength from outside markets, including crude oil.
But wheat fell in choppy trade on reminders of strong global competition for export business amid ample world supplies, and a stronger dollar.
At the Chicago Board of Trade, the most-active November soybean contract settled up 14 cents at $ 8.79 a bushel. December corn ended up 1-3/4 cents at $ 3.75 while December wheat fell 4-1/2 cents at $ 4.89-3/4 a bushel.
Soybeans rose after China’s two main stock indices surged 5.3 percent and 5.9 percent, snapping a five-day losing streak that had wiped around 20 percent in market value and sent tremors around global financial markets.
Forecasts for dry weather in portions of the Midwest added support.
“Beans are putting in a little premium on forecasts that show drier weather for southern Illinois and Indiana. They look to be short-changed as far as rain goes, and that could adversely affect their late-filling soybean crop,” said Brian Hoops of Midwest Market Solutions.
Strong weekly US export sales for soybeans and corn added to bullish sentiment. The US Department of Agriculture reported net weekly soybean export sales for the 2015/16 marketing year that begins Sept. 1 above trade expectations at 1.457 million tonnes.
Weekly corn export sales were strong as well, at nearly 1 million tonnes for 2015/16.
But a resurgent US dollar limited the rally in corn and pressured wheat, which is particularly sensitive to currency moves because the United States typically exports close to half its annual wheat crop.
The inability of US wheat to compete with cheaper grain from the Black Sea region was underscored on Thursday as Egypt’s state grain buyer, the General Authority for Supply Commodities (GASC), bought 60,000 tonnes of Russian wheat in a tender. No US wheat was offered.
After the CBOT close, Egypt’s GASC issued an additional tender for wheat, with results expected on Friday.
Ample global supplies anchored prices. The International Grains Council raised its forecast for 2015/16 global wheat production by 10 million tonnes, to 720 million, while Australia’s largest wheat producing region is likely to receive ample rains during a crucial yield-setting stage.
