SINGAPORE: Chicago soybeans ticked higher on Monday after dropping to their lowest in more than two years earlier in the session, although a strengthening dollar and lacklustre demand for US cargoes limited the upside in prices.
Corn slid to a one-week low, while wheat fell for a second session. “It is more of the dollar impact on prices right now,” said one Singapore-based oilseed trader.
“For fundamentals, the market is well supplied and demand remains a concern.”
The most-active soybean contract on the Chicago Board of Trade (CBOT) added 0.2% at $11.90-3/4 a bushel, as of 0334 GMT, after sliding earlier in the session to its lowest since November 2021 at $11.83 a bushel.
Corn fell 0.3% to $4.41-1/4 a bushel, not far from weakest since Jan. 30 reached earlier on Monday, and wheat lost 0.8% to $5.94-3/4 a bushel.
The soybean market is facing pressure as the dollar rose to an eight-week high against its major peers on Monday as traders clawed back bets for aggressive rate cuts by the Federal Reserve this year in view of a still-resilient US economy.
A stronger dollar makes the greenback-priced products expensive for buyers holding other currencies.
Soybeans faced additional pressure from poor export demand.
Soybeans hit 2-year low amid ample supply and weak demand
US soybean export sales in the week ended Jan. 25 totalled just 165,800 metric tons, the US Department of Agriculture (USDA) said on Thursday, the smallest weekly tally since May.
The market shrugged off adverse weather conditions in Argentina.
A dry heat wave in Argentina has prompted warnings over growing conditions for grains and the need for rain if soy and corn crops are going to stay on track for bumper harvests.
The South American country, one of the world’s top processed soy exporters and number three for corn, is recovering from a drought-hit harvest last season with the El Nino weather pattern bringing better rains. Corn is expected to be a record harvest.
In news which is delaying cargo movement, more ships carrying grain were diverted from the Suez Canal to routes around the Cape of Good Hope this week as attacks on shipping in the Red Sea continued.
About 7 million metric tons per month of grain cargoes usually transit the Suez Canal into the Red, but that has dropped significantly as Iran-backed Houthi have continued attacks on shipping despite US-led air strikes on Houthi positions in Yemen.
Large speculators increased their net short position in CBOT corn futures in the week ended Jan. 30, regulatory data released on Friday showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and increased their net short position in soybeans.
Source: Brecorder
