CHICAGO: Chicago Board of Trade soyabean futures jumped on Friday on short covering before a long weekend, a day after slumping to a three-year low, analysts said.
Corn futures set a three-year low for the third consecutive session under pressure from large supplies, while wheat futures extended losses to a 2-1/2-month low.
Traders digested forecasts for US crop inventories to swell in 2024/25 and also adjusted positions before the three-day holiday weekend. The CBOT will be closed on Monday for Presidents Day.
“The soyabean market is quite oversold,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage.
Most-active CBOT soyabeans settled up 10 cents at $11.72-1/4 per bushel, after falling on Thursday to the lowest price since December 2020 at $11.60-1/4.
CBOT corn closed down 1-1/4 cents at $4.16-1/2 a bushel, after touching its lowest level since December 2020 earlier on Friday at $4.15.
The USDA’s chief economist said this week that US soyabeans would face slowing demand from top importer China and steep competition from South America. Beneficial rain for crops in Argentina and Brazil have tempered worries about heat and drought losses.
“The better weather in South America, along with declining US exports, leaves traders with little reason to buy soyabeans in the short run except for short-term profit-taking,” Pfitzenmaier said.
The USDA said on Thursday that US soyabean ending stocks would climb to 435 million bushels in 2024/25, the highest since 2019/20, and US corn stocks would balloon to 2.532 billion bushels, the most since the 1987/88 season.
Market reaction to the projections may fade as traders await clearer evidence of US planting trends and look ahead to more detailed 2024/25 forecasts, Commerzbank said.
“When prices are low, corn is a high-cost crop,” said Jim Gerlach, president of brokerage A/C Trading. “You’re going to see some of those marginal acres drop.”
In US wheat markets, futures set contract lows. Most-active CBOT wheat settled 6-1/2 cents lower at $5.60-1/2 per bushel and tumbled 6.1% for the week.
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