Chicago | Reuters — U.S. grain and soybean futures rose on Tuesday in a turnaround from recent sharp losses, while soymeal futures neared a two-week high following a decision by Argentina to suspend cuts to export taxes for the livestock feed, traders said.
Prices were recovering after tumbling on Friday when the U.S. Department of Agriculture (USDA) projected domestic farmers will harvest the biggest U.S. soybean crop ever and produce the highest corn yields. Grain futures extended the decline on Monday, touching their lowest in more than two weeks.
The recent selling was overdone, opening the door for a rebound, said Karl Setzer, risk management team leader for MaxYield Cooperative in Iowa.
“What is the most friendly for the market right now is the recent losses we have seen,” he said.
December wheat futures jumped 1.4 per cent to $5.61-1/4 a bushel at the Chicago Board of Trade (all figures US$). On Monday, the most active contract fell to its weakest since July 27.
Most active corn futures advanced 1.6 per cent to $3.76-1/2 a bushel, after falling to their lowest since July 25 on Monday.
Most active soybean futures gained 1.3 per cent to close at $8.79-3/4 bushel. The contract extended a rebound from a three-week low on Monday, which followed a near five per cent tumble on Friday.
“Recent selling has dropped corn and soybeans to a point where additional losses may be hard to justify,” Setzer said.
Helping to support gains were concerns that U.S. corn and soy harvests could fall short of USDA’s estimates, analysts said.
In a weekly report issued after the close of trading on Monday, USDA lowered its condition ratings for the soybean and corn crops.
“People are still looking at the corn market and saying this is undervalued,” said Rich Nelson, chief strategist for Illinois-based broker Allendale.
Soymeal futures also traded higher after Argentina suspended its program of gradually cutting soymeal and soyoil export taxes for six months. The decision is part of a fiscal tightening program.
U.S. analysts, however, said the move also signals the government believes global demand is strong.
China, the world’s top soy importer, has increased purchases of the oilseed from South America due to its ongoing trade row with the U.S.
CBOT September soymeal ended 2.5 percent higher at $335.80 per ton, after touching its highest since Aug. 1.
— Tom Polansek reports on agriculture and commodities for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.