US soyabean futures climbed to a one-month high on Tuesday, led by the soyameal market on bargain buying and concerns that a slowing US soya crushing pace might tighten supplies of the animal feed ingredient, analysts said. Corn futures on the Chicago Board of Trade drifted lower, erasing early gains, while nearby wheat futures fell to contract lows on technical selling and poor export demand for US supplies.
At the CBOT as of 12:05 pm CST (1805 GMT), soyabeans for January delivery were up 8 cents at $8.91-1/4 per bushel while January soyameal was up $3.40 at $288.70 per short ton. Soyabeans and soyameal futures fell to multi-year lows last month, due in part to fears that Argentine farmers might sell soyabeans aggressively following a November 22 presidential election.
Both markets have since rallied on bargain buying. "There are questions about South America: if and when the farmers are going to sell. In the meantime, animals are hungry and they need to eat, and we've got (soyameal) prices below $300 a ton. It looks kind of appealing," said Bill Nelson, analyst with Doane Advisory Services in St. Louis. Support also stemmed from concerns that softening profit margins might prompt US soyabean processors to slow their crushing pace, restricting supplies of soyameal and soyaoil.
CBOT wheat fell on weak demand and improved condition ratings for the US winter crop. Most-active March wheat was down 3-1/2 cents at $4.72 a bushel after setting a contract low at $4.71-1/4. "There is more downside for wheat as export demand for US wheat is reducing and we are seeing favourable crop production prospects," Kaname Gokon at brokerage Okato Shoji in Tokyo said.
"Overall the market is trapped in a bearish trend." US winter wheat was rated 55 percent good-to-excellent as of Sunday, compared with 53 percent a week ago and higher that the market expectation of 54 percent, the US Department of Agriculture said on Monday. The market had little reaction to a downgrade in the Australian government's wheat production estimate. The wheat crop for the season ending July 1, 2016, was forecast at 23.98 million tonnes, down from 25.28 million previously, the Australian Bureau of Agricultural and Resource Economics and Sciences said. CBOT corn futures set back from early strength, with the March contract down 1 cent at $3.71-1/4 a bushel after reaching $3.75-1/2, its highest since November 10.
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