US grain and soyabean futures strengthened on Monday as technical buying and positioning ahead of US crop reports overshadowed concerns about poor export demand. Soyabean oil neared a two-month high. Traders were adjusting positions in the markets before the US Department of Agriculture (USDA) issues reports on crop production, supplies and demand on Friday. Some analysts said the agency may cut its estimates for how many acres of soyabeans and corn will be harvested this year due to unfavourable weather.
However, advancing US harvests and sluggish export demand will limit gains until the USDA resolves uncertainty over acreage in the monthly reports, said Rich Feltes, head of market insights for US broker RJ O'Brien. Chicago Board of Trade November soyabeans jumped 1.1 percent to $8.84-1/4 a bushel in a turnaround after the front-month contract dropped about 1.7 percent last week.
December soyabean oil ended up 2.1 percent at 28.66 cents per pound after traded to 28.81, the contract's highest price since August 19. Spillover support from gains in the Malaysian palm oil and crude oil futures markets helped support the rally, traders said. December corn gained 1.1 percent to $3.93-1/2 a bushel after finishing last week near unchanged. December wheat edged up 0.4 percent to $5.15-1/2 a bushel after rising more than 1 percent last week. The market on Thursday touched its highest level in more than seven weeks at $5.23-3/4.
Commodity funds bought an estimated 7,000 soyabean contracts, 6,000 contracts each of soyabean oil and corn, and were even in wheat, traders said. The United States continues to face intense competition over wheat exports from other countries offering cheaper supplies. Egypt, the world's top wheat importer, bought 235,000 tonnes of Russian and Ukrainian wheat in a tender on Saturday. The soyabean market also faces headwinds from plentiful global supplies, which are providing stiff competition to US exporters. The US soya harvest is probably about 41 percent complete and the corn harvest is about 30 percent complete, analysts said in a Reuters poll. The USDA will provide its estimates in a weekly report due at 3 pm CDT (2000 GMT).
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