Chicago | Reuters — U.S. soybean futures rose nearly one per cent on Wednesday on bargain buying and short-covering, one day after a U.S. government forecast for record global soy inventories pushed the front contract to its lowest level in a year.
Corn futures advanced as traders focused on uncertain planting weather in the U.S. Midwest. Wheat closed flat, paring gains in the closing minutes of trade.
Chicago Board of Trade May soybeans settled up 8-1/2 cents at $9.47-3/4 per bushel (all figures US$). May corn ended up 2-1/2 cents at $3.69 a bushel while May wheat finished unchanged at $4.33-1/4.
Soybeans firmed as analysts considered whether the market has already dialed in the most bearish fundamental factors, including huge South American harvests and expectations for a jump in U.S. plantings for 2017.
The U.S. Department of Agriculture in a monthly report on Tuesday raised its estimate of Brazil’s soybean crop to 111 million tonnes, from 108 million last month. USDA put the Argentine soy crop at 56 million tonnes, up from 55.5 million in March.
Reflecting the big harvests, the government raised its forecast of global soybean stocks at the end of the 2016-17 marketing year to 87.41 million tonnes, up from 82.82 million in March and above an average of trade estimates for 83.91 million.
“I think we have probably inked the biggest South American production figures. And now we have to see if it’s actually realized,” said Bill Gentry, a broker at Risk Management Commodities in Lafayette, Indiana.
Additional support stemmed from concern about a slow pace of soybean sales by Brazilian farmers, as well as spillover strength from soymeal futures on China’s Dalian Commodity Exchange.
Traders are shifting their attention to the planting of the 2017 U.S. corn and soybean crops, focusing on weather in the core Midwest production belt. USDA said the corn crop was three per cent planted by Sunday, matching the five-year average.
But rains this week stalled fieldwork in some areas, raising concern about planting delays. Soybeans are typically planted later than corn.
“We are wet, and the forecast says we are going to be wet until the end of the month. So anybody that’s crowding the short side is probably just getting their resolve checked,” Gentry said.
Wheat drew light support from news that farming agency FranceAgriMer cut its forecast for French soft wheat stocks at the end of the 2016-17 season to 2.6 million tonnes, from three million last month.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.