Chicago | Reuters –– U.S. soybeans closed mostly higher on Wednesday as good near-term demand and firm cash soymeal prices enticed bargain hunters after earlier pressure stemming from technical selling and improving South American crop prospects.
Corn rose modestly for a second consecutive day as frigid weather around the U.S. Midwest curbed grain movement and amid concerns about a smaller Argentine crop following hot weather earlier this month.
Soft red winter wheat futures ended slightly lower while hard red winter wheat rose for the first time in three sessions on improving export demand.
“Beans recovered on short-covering due to improving soybean meal prices,” said Tom Fritz, a partner with Global Commodity Analytics.
“The meal market has been the driving force for beans for a while and our soybean demand is quite good, not only from an export standpoint, but from a domestic usage standpoint.”
A cold snap stretching from the Plains to the East Coast supported soymeal demand this week as livestock tend to burn more calories when staying warm.
Chicago Board of Trade March soybean futures closed a penny lower at $12.79-1/2 a bushel after hitting a session low of $12.72 — the lowest level for a front-month contract since November (all figures US$). Deferred contracts, however, ended one to four cents higher.
March fell below its 200-day moving average of $12.76-1/4 during the session, which added to earlier selling pressure, but closed above that level.
Still, prices remained anchored by improving crop weather in Argentina and near-ideal conditions in Brazil. The two major exporters are both expected to reap bumper harvests this season.
“The weather is just about as nice as it can be for the crop,” said Sterling Smith, analyst with Citigroup.
Ample rains expected in the Argentine grain belt over coming days should help farmers preserve soy yields that had been threatened by recent weeks of extreme dry and hot weather.
CBOT March corn gained 1-1/4 cents, or 0.3 per cent, to $4.26-1/4 a bushel.
CBOT March wheat fell one cent to $5.61-1/4 a bushel while March KCBT wheat gained 3-1/2 cents, or 0.6 per cent, to $6.24-3/4 a bushel.
Frigid weather around the U.S. Midwest this week posed a slight risk of freeze damage to about 15 per cent of the region’s soft red winter wheat crop, primarily in Missouri and Illinois, an agricultural meteorologist said Wednesday.
The harsh conditions also slowed farmer deliveries of corn to elevators and processors, which kept cash basis levels firm.
Meanwhile, the recent decline in corn and wheat prices to around three-and-half-year lows encouraged importers to lock in supplies.
Iraq made a rare purchase of 50,000 tonnes of U.S. hard red winter wheat via a larger tender that also included 200,000 tonnes of Australian wheat and 100,000 tonnes of Canadian.
— Karl Plume reports on ag commodity futures for Reuters from Chicago.