New-crop US soybean futures rose half a percent on Wednesday, supported by China's purchases and concerns over the late developing crop. Corn and wheat also firmed, tracking gains in soybeans, but the wheat market was under pressure from ballooning global supplies and weak demand for US wheat.
Although immediate weather forecasts point to favourable growing conditions, soybeans, which were sown late due to wet spring, are vulnerable to crop-damaging frost in September. "Widely scattered showers and thundershowers on Friday and Saturday, light showers east, mostly dry conditions west on Sunday," said DTN Meteorlogix said in its latest forecast for the Midwest soybean crop. "Temperatures near to below normal on Friday, near normal east, below normal north-west Saturday."
Soybean futures ended mostly lower on Tuesday as a rally to 1-1/2 week highs gave way to profit-taking. Last week, the US Department of Agriculture said China, the world's top soy buyer, made large purchases of US soybeans, taking 896,000 tonnes.
And private exporters reported the sale of 110,000 tonnes of US soybeans to China for delivery during the 2009/10 marketing year, USDA said. "It is late developing Midwest soy and corn, the weather is still looking non-threatening. That said, late development means crops are at more risk to any adverse late season weather events," said Toby Hassall, an analyst with Commodity Warrants Australia.
"China is going to be a pretty active buyer on any breaks in soy price, we are still seeing strong demand for US beans." Chicago Board of Trade soybeans for September delivery rose 0.6 percent to $10.97 a bushel by 0357 GMT, while the new-crop November soy gained 0.5 percent to $10.04 a bushel.
China's Dalian soybean futures were little changed, with the most-active May contract up 0.13 percent at 3,726 yuan a tonne. Analysts said weakening prices of oil, which often guides movement in corn and soybean for their use in making alternative fuels, capped gains.
Oil extended losses below $72 after sliding 3 percent from its highest since last October a day ago, hit by industry figures showing a hefty rise in US crude stocks and overshadowing upbeat economic data. September corn rose 0.4 percent to $3.22-3/4, while wheat was up 0.6 percent at $4.73 a bushel. Wheat, which is trading around 8-month lows, has been weighed down by hopes of bumper output across the world. "I wouldn't be surprised to see a little bit more downside in the wheat market," said Hassall.
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