Chicago | Reuters—Chicago Board of Trade (CBOT) soybean futures surged to a two-month high on Thursday as worries about threatening weather in Argentina triggered speculative buying and short-covering, analysts said, but the market pared gains after the rally spurred a round of farmer sales.
Corn and wheat futures closed modestly higher.
CBOT May soybeans SK24 settled up 2-1/2 cents at $12.12 per bushel after rising to $12.26-3/4, the highest on a continuous chart of the most-active contract Sv1 since Jan. 26.
CBOT May corn CK24 settled up 1-3/4 cents at $4.40-3/4 a bushel, and May wheat WK24 settled up 1-3/4 cents to $5.46-3/4 a bushel.
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Soybeans came off their highs and even turned lower at times as producers in the United States and South America sold supplies, seizing on the jump in prices.
“We are seeing an influx in farmer selling,” said Tom Fritz, a partner at EFG Group in Chicago, adding that producers were selling soybeans as well as other crops.
News of damaging rain and hail over key grain-producing regions in Argentina helped buoy soybean futures late on Wednesday. But some forecasts called for drier weather over the next week.
“It will nick the production, but the extent of the damage is still yet to be seen,” Michael Cordonnier, owner of Soybean and Corn Advisory, said.
Argentina’s Buenos Aires Grains Exchange lowered its estimate of the country’s corn crop to 54 million metric tons, from 56.5 million previously, while leaving its soybean crop estimate unchanged at 52.5 million metric tons.
Traders continue to adjust their positions ahead of the U.S. Department of Agriculture’s March 28 Prospective Plantings and quarterly stocks reports, which have a history of jolting markets.
Large global grain supplies at cheap prices continue to weigh on the competitiveness of U.S. grains. Funds hold sizable net short positions in soybean, corn and wheat futures, priming markets for bouts of short-covering.
—Additional reporting for Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.
