U.S. grains: Soy eases on profit-taking after big weekly gains

(Scott Bauer photo courtesy ARS/USDA)

Chicago | Reuters –– U.S. soybeans futures fell one per cent on Friday, reversing from a two-month high while wheat and corn also eased as investors took profits after recent gains, traders and analysts said.

Front-month Chicago Board of Trade November soybeans tested Thursday’s peak of $10.20 per bushel, but topped out at $10.17-1/2 and then lost ground, settling 13 cents lower at $10.01-1/4 (all figures US$).

Soy prices were up three per cent for the week, their largest such gain in about two months, as strong export demand led by China offset pressure from record-large U.S. soybean yields and production. The surge in soy exports contributed to better-than-expected U.S. economic growth in the third quarter, Commerce Department data showed.

However, cash markets for soybeans have weakened in recent days, suggesting U.S. supplies were sufficient to satisfy demand, the traders said.

CBOT December wheat eased six cents, or 1.5 per cent, to $4.08-1/2 per bushel and CBOT December corn was off 2-1/2 cents to $3.55.

“Some of these markets have had a decent move, so we’re just in a consolidation phase,” EFG Group analyst Tom Fritz said.

“There’s not a lot of news around. People are hesitant to chase the soybean rally, and the wheat market is still everyone’s favorite short for intermarket spreads,” Fritz said.

The U.S. has been the dominant global soybean exporter for months amid limited supplies in South America. Farmers in Argentina and Brazil were enjoying largely benign conditions early in the growing season, even as parts of Argentina had excessive rainfall.

Global wheat supplies were more burdensome and U.S. wheat has struggled to compete with Russia due to freight costs for shipments into northern Africa and Middle East, including top importer Egypt.

U.S. wheat and corn futures were lower, despite declines in the dollar against a basket of currencies. A lower-valued dollar typically supports grain futures as it can make U.S. goods cheaper in international markets.

CBOT soymeal futures were sharply lower while soyoil futures gained nearly 1 percent as actively traded soymeal-soyoil spreads corrected. Steep gains in soymeal on Wednesday and Thursday helped to prop up soybean prices.

“The very strong demand for U.S. soybeans at present is driving the prices up,” Commerzbank said in a note. “That said, robust U.S. exports are not unusual at this time of year because harvesting is currently underway in the U.S., whereas planting has not even begun yet in South America.”

Michael Hirtzer reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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