Soybeans, corn futures rally on wet weather woes

CHICAGO: Chicago soybean and corn futures gained strength on Monday, as uncertainty has re-emerged in the weather forecast for much of the US grain-producing states.

Forecasts of cooler and wetter conditions across the US Midwest raised new concerns about how much of the current crop might be lost - as well as how much of the corn and soybean yields might be hampered by the stress of excess moisture.

"Everyone is focusing on the dramatic weather right now," said Dan Basse, president of Chicago-based consultancy AgResource Co. "People are starting to buy back their position in expectation of the crops being damaged."

Crops in as much as 30% of the Midwest is at significant risk for rain-related stress in the coming days, particularly in the Plains and portions of the western Midwest, according to a Commodity Weather Group report on Monday.

But limited rains and warmer patterns could impact corn and soybean fields in areas that have been far drier, including parts of Illinois, Indiana and Ohio.

Wheat futures slipped in midday trading on profit-taking, traders said.

The most active Chicago Board of Trade (CBOT) corn contract was up 0.9% at $4.13 a bushel at 10:54 a.m. CDT (1554 GMT).

CBOT most active wheat contract was down 0.4% at $4.89 a bushel. The most active CBOT soybean contract was up 0.1% at $8.69-1/2 a bushel, after finishing last week down more than 3%.

Trade war concerns continue to weigh on the soybean market, traders said, as confidence in China's demand for - and need to buy - US soybeans is wavering.

Last week, the US Department of Agriculture cut its forecast for Chinese soybean imports for the 2019-2020 marketing year to 80 million tonnes, as China grapples with declining sow and hog inventories as African swine fever spreads.

US President Donald Trump last week said he would impose an additional 10% tariff on $300 billion worth of Chinese imports starting Sept. 1, citing insufficient progress in trade talks between the world's two largest economies.

The market mostly shrugged off news that Beijing said it is honouring its pledges to buy US agricultural products, and dismissing an accusation from US President Donald Trump that it had not met purchasing promises in the sector.

Weekly data on Aug. 1 confirmed the first new soybean sale to China since June, of 68,000 tonnes from the crop that will be harvested this autumn. Additional sales could be recorded in the next export sales report on Thursday.