Chicago | Reuters — U.S. soybean futures rose 1.7 per cent on Tuesday on worries about dry weather hurting crop prospects in Argentina, despite rains expected in the coming days, analysts said.
Corn rose on the weather worries and on improving export demand for U.S. supplies, and wheat followed the firm trend.
Chicago Board of Trade March soybeans settled up 16-1/2 cents at $9.86-1/4 a bushel (all figures US$). March corn ended up 4-3/4 cents at $3.63-1/2 a bushel and March wheat rose six cents at $4.46-1/4 a bushel.
Soybeans firmed on worries that rains forecast for Argentina’s crop belt late this week and possibly through the weekend might not be enough to relieve stress on corn and soybeans. Argentina is the world’s top exporter of soymeal and soyoil, and the No. 3 corn supplier.
“We’ve really oversold the market to the short term with this one weather event,” said Terry Reilly, senior analyst with Futures International, noting that CBOT March futures declined in each of the previous four sessions on expectations of Argentine rains.
Others noted forecasts calling for a return to stressful dry weather in the region next week.
Meanwhile, in Brazil rains have slowed early soybean harvest, lending some support to futures prices.
“It’s not going to be a major delay, but I think there are going to be enough showers to slow things down and potentially inhibit the flow to the ports,” said Rich Feltes, vice-president for research with R.J. O’Brien.
CBOT March soyoil futures touched a three-week high, buoyed by optimism that U.S. lawmakers might soon renew a $1/gallon biodiesel tax credit. Soyoil is the primary U.S. feedstock for biodiesel fuel.
Corn futures climbed more than one per cent, with the March contract reaching $3.64, its highest level since Nov. 6, on Argentine weather worries and stepped-up export demand.
The U.S. Department of Agriculture said private exporters sold a total of 225,000 tonnes of U.S. corn in the last day, the government’s third corn sales announcement in as many business days.
“U.S. supplies are priced competitively in export markets and supplies are available to sell,” said Matt Ammermann, commodity risk manager at INTL FCStone, adding that a trade dispute with China over sorghum could hurt the sector.
Traders also noted positioning in grain and soy markets ahead of the USDA’s monthly world supply and demand estimates on Thursday.
— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.