U.S. grains: Soy up ahead of USDA data

(Scott Bauer photo courtesy ARS/USDA)

Chicago | Reuters — U.S. soybean futures climbed nearly one per cent on Tuesday, halting a three-session slide, as traders adjusted positions a day ahead of a U.S. government crop report and as excessively wet weather in the Midwest raised concerns, analysts said.

Corn futures closed modestly higher while wheat fell, pressured by a stronger dollar and better-than-expected weekly U.S. condition ratings.

The benchmark CBOT July soybean contract settled up 9-1/4 cents at $9.74 per bushel (all figures US$). July corn ended up 1/2 cent at $3.66-1/2 a bushel while July wheat fell four cents to $4.29-1/2 a bushel.

Soybeans halted a three-session slide, climbing as traders covered short positions ahead of the U.S. Department of Agriculture’s May 10 supply/demand report. The report will include the government’s first official crop production and usage estimates for the 2017-18 marketing year.

“It’s the pre-report ‘buy beans, sell corn’ trade,” said Mike Zuzolo, president of Global Commodity Analytics.

Wet conditions that have slowed planting in some crop areas added support. The USDA on Monday said the U.S. soybean crop was 14 per cent planted, behind the five-year average of 17 per cent and below an average of analyst expectations for 16 per cent.

“I think we are adding risk premium to the market. With all the weather out here, it’s the wrong time of year to be too bearish,” said Don Roose, president of Iowa-based U.S. Commodities.

CBOT corn firmed but trailed the advances in soybeans. USDA on Monday said the U.S. corn crop was 47 per cent planted, behind the five-year average of 52 per cent but ahead of an average of analyst expectations for 44 per cent.

Wheat fell after the USDA rated 53 per cent of the U.S. winter wheat crop as good to excellent, down from 54 per cent the previous week but above an average of trade expectations for 51 per cent.

The government also reported that the U.S. spring wheat crop was 54 per cent planted, behind the five-year average of 60 per cent but well above the average trade expectation of 45 per cent.

“The spring wheat planting number blew the analysts’ expectations out of the water. That and the high dollar is weighing on prices,” said Terry Reilly, analyst with Futures International.

A strong dollar tends to make U.S. grains less competitive on the global export market. The U.S. dollar index rose as risk appetite improved following the French election, and investors focused on monetary policy and potential upcoming Federal Reserve interest rate hikes.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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