U.S. grains: Front-month soy tops US$10

(Scott Bauer photo courtesy ARS/USDA)

New York | Reuters — U.S. spot soybean futures closed above US$10 a bushel on Friday, the highest in 2-1/2 months, on follow-through buying a day after the U.S. Department of Agriculture lowered its estimate of the U.S. average soy yield, analysts said.

Corn futures rose on a bigger-than-expected weekly export sales tally and wheat advanced on short-covering despite disappointing export sales.

Chicago Board of Trade November soybeans settled up 8-1/4 cents at $10.00-1/4 per bushel after reaching $10.03-1/4, the contract’s highest since July 31 (all figures US$).

CBOT December corn ended up 3-3/4 cents at $3.52-3/4 a bushel while December wheat rose nine cents to $4.39-1/2 a bushel.

Soybeans climbed as the trade digested Thursday’s monthly USDA report, in which the government lowered its U.S. soybean yield estimate to 49.5 bushels per acre, from 49.9 in September, bucking analyst expectations for an increase.

USDA also cut its forecast of the amount of soybeans left at the end of the 2017-18 marketing year — the “carry-out” — to 430 million bushels, from 475 million a month ago.

“The report was considered friendly on soybeans; carry-out was lowered more than expected, and we had a little yield reduction,” said Ag Watch Market Advisors president Dewey Strickler.

Soy and corn futures drew additional support from strong weekly U.S. export sales data. USDA on Friday reported export sales of U.S. soybeans in the latest week at more than 1.7 million tonnes and corn sales at about 1.6 million tonnes, topping a range of trade expectations.

Concern about weather in top soy exporter Brazil, where planting is under way, lent support as well.

“Brazil’s dry soybean regions, Mato Grosso in particular, look unlikely to get enough rain to broadly raise soil moisture for another week or so,” said Tobin Gorey of the Commonwealth Bank of Australia.

Wheat followed soybeans and corn higher despite lower-than-expected weekly U.S. export sales, and bearish stocks forecasts in USDA’s monthly reports on Thursday.

“Wheat is catching the back end of spreading from corn and soybeans. Wheat numbers were negative, and that’s all you can say about them,” Strickler said.

Short-covering lifted CBOT December wheat to a session high toward the close, traders said. Funds hold a sizable net short position in CBOT wheat, leaving the market vulnerable to bouts of short-covering.

Strength in the broader commodity sector added to bullish sentiment in grains. The 19-market Thomson Reuters CoreCommodity Index rose 0.8 per cent after reaching its highest since May.

— Julie Ingwersen is a commodities correspondent for Reuters; additional reporting by Michael Hogan and Naveen Thukral.

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