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Friday, January 27, 2023

Soybeans rise on fears drought will cut Argentine crop, wheat firms

HAMBURG: Chicago soybeans were supported by fears about dry weather in key supplier Argentina while wheat rose after Friday’s fall and corn was flat.

Chicago Board of Trade most-active soybeans rose 0.2% to $14.96-3/4 a bushel at 1206 GMT. Wheat rose 0.1% to $7.44-3/4 a bushel and corn was unchanged at $6.54 a bushel.

“Soybeans remain supported by fears about damage to the Argentine crop from drought with weather forecasts still looking overall dry in the country,” said Matt Ammermann, StoneX commodity risk manager. “The USDA (U.S. Department of Agriculture) report on Thursday will provide a new crop forecast which will be closely watched.”

“But price moves are relatively modest today and I think the main shock factor from the Argentine drought has already been priced in. Brazil is expecting a very large soybean harvest so a reduction in Argentina’s crop could be more of a trade displacement story than soybean supply tightness.”

More soybean importer demand from China was also expected as travel resumes.

Brisk demand underpinned wheat, with several international purchase tenders issued. Turkey is seeking 565,000 tonnes and Egypt an unknown volume.

“Wheat is seeing support from buying interest after recent falls, with more import demand also supportive, with tenders issued from importers including Egypt and Turkey,” Ammermann said.

“There is also support from geo-political risks, especially concern about an escalation of the war in Ukraine. But very cheap export prices offered for Russian and Ukrainian wheat are keeping a cap on rises.”

“Corn is seeing some support from wheat, but it is difficult to find bullish arguments for corn.”

A large Brazilian harvest will be offered on the world market soon, while U.S. corn exports are currently running behind the volume needed to achieve the USDA’s export expectations for the United States, he said.

Soybeans rise on fears drought will cut Argentine crop, wheat firms

Source: Brecorder

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