CHICAGO: Chicago soybean futures rallied more than 1 percent on Thursday as investors played down the immediate impact of proposed Chinese tariffs on U.S. supplies, a move that had sent prices plunging a day earlier.
U.S. winter wheat futures jumped as much as 2 percent, lifted by worries that cold temperatures could stress crops in the southern Plains. Corn futures also gained as spring sowings could get off to a slow start due to soggy weather.
Prices for both soybeans and corn stayed within ranges established during Wednesday’s session, when China proposed imposing tariffs on U.S. soybeans. China buys about two-thirds of globally traded soybeans.
“We’re bouncing off the lows from yesterday and the higher stock market is probably helping,” said Highground Trading broker Scott Capinegro.
Chicago Board of Trade May soybeans were up 16 cents to $10.31-1/4 per bushel, recovering a portion of the declines notched in the previous session. CBOT May corn was up 7 cents at $3.88 per bushel as of 11:58 a.m. CDT (1658 GMT).
Traders doubted whether China could shun U.S. soybeans given its huge import requirements, while investors more widely saw signs the two sides may choose to negotiate.
“At second glance … it becomes clear that U.S. soybeans are exported to China predominantly between October and March – that is to say during and shortly after the U.S. harvest – so most of the soybeans should already have been shipped by now,” Commerzbank analysts said in a note.
However, the uncertainty created by the Chinese-U.S. trade row could still weigh on U.S. prices, some analysts said.
“It is going to mean surplus soybeans, and lower soybean prices in the U.S.,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.
CBOT May wheat was up 8-1/2 cents to $4.64-1/4 per bushel and K.C. May wheat was 11 cents higher at $4.97.
Sub-freezing temperatures forecast on Friday night in the Plains would add to wheat crop stress in a region already suffering from dry weather, the Commodity Weather Group said in a note.
The U.S. Department of Agriculture said on Monday that only 32 percent of the U.S. winter wheat crop was in good to excellent condition, the lowest rating for this point in the crop year since 2002.
Source: Brecorder
