US soya ended firm on Monday, fuelled by a drought stressing the crop in Argentina, the world's third largest exporter. "The US weather model for Argentina is hot and dry and the market is going with that forecast," said Joe Bedore, floor manager for trade house FC Stone.
However, soya ended well below the day's highs and was pressured late by midday weather forecasts indicating rainfall in Argentina's soya areas. US soya for March delivery ended up 1 cent per bushel at $10.02 per bushel after hitting a high of $10.19. Traders said that the US computer weather model indicated hot and dry weather while the alternative European model indicated wetter weather in Argentina.
Rainfall now would benefit the crop which is in its key pod-setting stage of development and vulnerable to harm from hot and dry weather. Harsh weather continues to cut into prospects for the soyabean, corn and wheat crops in Argentina. Corn ended mixed with March delivery corn up a 1/4 cent to $3.77-1/2, while wheat gained with March up 8 cents to $5.65 per bushel. Analysts said the gains were largely technical ahead of the release early Tuesday of the US government's latest crop report.
"I think it was just position evening before tomorrow's report and realignment of spreads. We missed all the wheat export business over the weekend so wheat was just up on technical short-covering," said Shawn McCambridge, analyst for Prudential Bache Commodities.
Traders said the weak dollar, which makes US produced commodities a better buy for foreign importers, helped lift prices. Some traders squared positions ahead of Tuesday's US Department of Agriculture February supply and demand report and updated world grain and soyabean production estimates.
The market expects the government to increase its forecast of the US corn supply at the end of this year, leave its wheat supply estimate about unchanged and trim its forecast of soyabean ending stocks. However, US supply and demand numbers likely will be overshadowed by the government's forecast for Argentina's soyabean production and updated weather forecasts for Argentina.
In thin volumes, European milling wheat futures tracked US prices higher with March adding 1.25 euros to 151.25 euros a tonne to edge above the psychological threshold of 150 euros reached at Friday's close. "Until tomorrow afternoon, the market may well be choppy," one European trader said, stressing the focus will be on the USDA's latest Argentina soya crop estimate.
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