U.S. grains: Soybeans extend rally

Chicago | Reuters — U.S. soybean futures rose on Friday on follow-through buying on the U.S. Agriculture Department’s surprise cut to its domestic production estimate and ending stocks on Thursday, traders said.

Soymeal led soybeans higher on concerns that forecasts for more rain in Argentina could limit the size of the soybean crop in the worlds top soymeal exporter.

“The very same fields that were flooded last week could be inundated again this weekend,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital, said in a note to clients.

Corn futures closed slightly higher while wheat was mixed, with the front-month CBOT soft red winter wheat contract easing while K.C. hard red winter wheat and MGEX spring wheat firmed. MGEX spring wheat hit its highest since July 2015.

Signs of persistently strong export demand for U.S. supplies helped turn soybeans higher.

The U.S. Agriculture Department said early Friday that private exporters reported the sale of 132,000 tonnes of soybeans for delivery to unknown destinations.

It was the first flash sale of U.S. soybeans since Dec. 21.

“That was a little bit of a psychological boost, especially after we got yesterday’s numbers.” said Jason Britt, president at Central States Commodities.

Chicago Board of Trade soybean futures for March delivery settled up six cents at $10.46-1/4 a bushel. CBOT March corn was up 1/4 cent at $3.58-1/2 a bushel (all figures US$).

CBOT March soft red winter wheat was down 1/4 cent at $4.26 a bushel. K.C. March hard red winter wheat was 4-1/4 cents higher at $4.49, reflecting a particularly steep drop in HRW area in USDA sowing estimates released on Thursday. MGEX March spring wheat gained 8-3/4 cents to $5.82-3/4 a bushel.

Wheat was lifted by a smaller-than-expected estimate of U.S. winter wheat sowings, which USDA pegged at the lowest level in more than a century.

“A response to depressed price levels, this 10 percent year-on-year cut (in wheat area) brings about the first step towards a U.S. supply and demand deficit in 2017-18,” Rabobank said.

A flurry of export activity on Friday highlighted global demand for high-protein supplies of wheat.

Turkey’s state grain board TMO purchased 99,000 tonnes of European Union-origin wheat. Tunisia’s state grains agency bought around 100,000 tonnes of durum wheat and South Korea’s Major Feedmill Group purchased about 60,000 tonnes of feed wheat.

Egypt, the world’s top buyer of wheat, tendered for supplies after the market closed.

— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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