U.S. grains: Soybeans rise on export deal

Chicago | Reuters — U.S. soybean futures firmed on Friday, as a fresh export deal highlighted the robust overseas demand for the oilseed and also supported by lingering concerns about dry conditions in Argentina, traders said.

Wheat futures were flat, retracing losses late in the session on a round of short-covering and worries about a cold snap in key production areas damaging the dormant crop.

Corn futures were slightly weaker, with ample global supplies pressuring prices. Short-covering helped limit the losses in corn.

For the week, Chicago Board of Trade soybean futures were down 0.1 per cent. Corn futures dropped 0.6 per cent this week while wheat was off 1.3 per cent.

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The U.S. Agriculture Department on Friday morning said private exporters reported a deal to ship 205,000 tonnes of soybeans to unknown destinations in the 2016-17 marketing year. It was the third flash sale of the week.

“Soybeans are still bullish despite the U.S. and South American harvests,” consultancy Agritel said in a note, stressing the big weekly U.S. export haul.

Analysts were expecting that overseas buyers will turn their attention to South American suppliers in the coming months but any crop deficits from those key production countries will boost demand for U.S. soybeans.

“Rain deficits are building in nearly half of Argentina’s corn and soybean belt but rains are still on the way next week, likely limiting concerning areas to around 20 per cent if precipitation comes through as anticipated,” Matt Zeller, director of market information at INTL FCStone, said in a note to clients.

CBOT January soybean futures were up 7-3/4 cents at $10.36-3/4 a bushel (all figures US$).

The strength in the soy market was capped by technical resistance as prices failed to break through Thursday’s high. A bearish forecast for production in Brazil also limited buying.

Brazilian independent analyst Safras + Mercado raised its forecast for Brazil’s 2016-17 soybean crop to 106.1 million tonnes, 9.2 per cent above the 2015-16 season and 2.5 per cent more than its previous projection in October.

CBOT March corn futures were down 1/4 cent at $3.56-1/4 a bushel and CBOT March wheat was unchanged at $4.09-1/4 a bushel.

Frigid temperatures are expected in the U.S. Plains and Midwest in the coming days, and roughly 20 per cent of the Plains hard red winter wheat crop and 10 per cent of the soft red winter wheat crop is vulnerable to damage, an agricultural meteorologist said on Friday.

— 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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