U.S. grains: Soy export demand extends rally while corn sags

(Scott Bauer photo courtesy ARS/USDA)

Chicago | Reuters — U.S. soybean futures rose for a fifth straight session on Tuesday, supported by persistent export demand, traders said.

Corn futures drifted lower, however, as traders adjusted positions ahead of monthly U.S. crop reports due on Friday, while wheat settled unchanged.

At the Chicago Board of Trade, the benchmark November soybean contract settled up three cents at $9.88 per bushel, paring gains late in the session after hitting a one-week high of $9.99-1/4 (all figures US$).

December corn ended down 2-1/4 cents at $3.32-1/2 a bushel and September wheat ended flat at $4.17 a bushel.

Soybeans climbed after the U.S. Department of Agriculture (USDA) through its daily reporting system said private exporters sold 120,000 tonnes of U.S. soybeans to unknown destinations for 2016-17 delivery. USDA has announced daily soybean sales in each of the last 10 trading sessions.

“The majority of the bean market is about all these sales we are making,” said Tom Fritz, partner with EFG Group in Chicago.

“Ten days in a row of USDA-announced sales; have we ever seen that before?” Fritz said.

CBOT corn drifted lower, with the most-active December contract staying inside the previous day’s trading range.

Ahead of USDA’s monthly supply/demand reports on Friday, analysts surveyed by Reuters expect the government to raise its forecasts of U.S. 2016-17 corn production and ending stocks, reflecting mostly favourable growing weather this summer.

USDA late Monday rated 74 per cent of the U.S. corn crop as good to excellent, down from 76 per cent the previous week but still historically high. Analysts surveyed by Reuters had expected a rating of 75 per cent good-to-excellent.

USDA late on Monday rated 72 per cent of the U.S. soybean crop as good to excellent, unchanged from the previous week and in line with trade expectations.

Brazil’s government crop supply agency Conab lowered its estimate of the country’s 2015-16 total corn crop to 68.48 million tonnes, down from 69.14 million in July and last year’s 84.67 million tonnes. But some U.S. traders who had feared a larger cut viewed the figure as mildly bearish.

CBOT wheat futures were little changed after a seesaw session as profit-taking after Monday’s two-week high offset support from worries about the size of Europe’s harvest.

France’s weather-hit soft wheat harvest will produce 28.68 million tonnes, down 30 per cent from a record 2015 crop, consultancy Agritel said.

Meanwhile, consultancy IKAR raised its estimate of Russia’s wheat crop by one million tonnes, to 70 million.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Gus Trompiz in Paris.

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