US soyabean futures on the Chicago Board of Trade rose 1 percent on Wednesday, rebounding from a five-week low in the previous session as a weaker dollar overshadowed concerns about a large South American crop. "This trade is a knee-jerk reaction to the dollar. I don't think there is a fundamental reason" for the rally, said Roy Huckabay, an analyst with the Linn Group in Chicago.
CBOT corn and wheat also advanced on the greenback's fall, but trade remained thin ahead of the Christmas holiday on Friday. The dollar set back from a 3-1/2-month high against the euro after an unexpected drop in US new home sales cooled optimism about the economy.
A softer dollar tends to lift grain futures by making US products more competitive on the world market, and by prompting investors to buy commodities as a hedge against inflation. CBOT soyabeans for January delivery settled up 10-1/4 cents at $10.01-1/4 per bushel, after falling to $9.84-1/2 on Tuesday, the lowest front-month price since November 13.
CBOT March corn ended up 6 cents, or 1.5 percent, at $4.04-3/4 a bushel. March wheat rose 6 cents, or 1.15 percent, at $5.29 a bushel. Soyabeans found additional support after the US Department of Agriculture confirmed sales of 367,000 tonnes of US soyabeans, including 110,000 tonnes to China, 114,000 tonnes to Italy and 143,000 tonnes to unknown destinations.
Strong demand from China, the world's top soya buyer, has been a major source of support for the CBOT soyabean market, but analysts have expected US sales to diminish as the harvest of what should be a large South American crop draws closer. On the domestic front, the US Census Bureau reported the November US soyabean crush at a record 168.6 million bushels, just above the average analyst estimate of 168.4 million.
However, on a bearish note, the bureau also reported November US soyaoil stocks at 3.156 billion lbs, well above the average trade forecast of 2.848 billion. "The oil stocks number implies that we used hardly any oil for biodiesel for the month of November," Huckabay said. "The oil yields were down and inventories should have been down." As a result, CBOT soyaoil futures trailed gains in the rest of the soya complex, with the spot January contract settling up just 0.03 cent at 38.08 cents per lb.
BLIZZARD IN THE US CORN BELT Corn traders were monitoring a blizzard in the US Plains and Midwest that was raising concerns about the 5 percent of US corn still standing in the fields, the equivalent of roughly 650 million bushels (16.5 million tonnes), analysts said. USDA in a weekly report late Tuesday said the corn crop was 95 percent harvested, up from 92 percent the previous week. Huckabay estimated about 450 million bushels were snow-covered, but he and other analysts said most of the remaining crop eventually would be harvested, and that ultimate crop losses would be small.
Comments
Comments are closed.