CHICAGO: Soybean prices rose 1.3 percent on Wednesday on bargain buying after a two-day setback and continued concerns about tightening domestic supplies amid the worst US drought in half a century.
Corn and wheat rebounded after a three-day slide.
Soybeans found support despite cooler temperatures and rains that have brought relief to parts of the Midwest this month, following the hottest July on record.
"Even though the weather is non-threatening, we still are looking at the general fundamentals," said Jason Roose, analyst with US Commodities in West Des Moines, Iowa.
"The (US soybean) stocks are still very tight and farmer holdings are very tight, and the yield is still questionable," Roose said.
At the Chicago Board of Trade as of 9:15 a.m. CDT (1415 GMT), benchmark November soybeans were up 21 cents, or 1.3 percent, at $16.19 per bushel. The contract had fallen from Friday's high of $16.68 to a low on Tuesday of $15.87 before beginning to move up again.
"I would say the demand side of the story for soybeans is certainly more supportive for prices than for corn and we haven't seen the kind of price rationing we need to see," Rabobank analyst Erin FitzPatrick said.
COOLER TEMPERATURES
Dealers continued to keep a close watch on weather forecasts for the US Midwest crop belt, with predictions of cooler temperatures and scattered rains potentially set to improve yield prospects for late-planted soybeans.
Roose said the rains were helping to fill soybean pods and even generating new growth in some fields. Others, however, said light showers this week would be too sparse to ease drought stress in the Midwest.
"In fact, the portion of the Midwest under stress could still expand by up to 10 percent from the current 35 percent over the next week," CWG meteorologist Joel Widenor said.
Frequent rains of 0.50 inch (1.3 cm) to 0.60 inch with up to 1.00 inch in some areas were expected from Wednesday through Friday in 85 to 90 percent of the Midwest and cooler temperatures with highs in the 70s (Fahrenheit) to the 80s, said Andy Karst, a meteorologist for World Weather Inc.
"Weather shouldn't be terrible for crops but we're on the edge with a moisture deficit because we still haven't had soaking rains," he said. "It will be drier over the weekend and early next week with the next chance of rain at midweek, and that will be important," Karst said.
RUSSIAN WHEAT EXPORTS EYED
CBOT December corn rose 6 cents or 0.76 percent to $7.95 a bushel, still well below Friday's all-time high of $8.49.
September wheat gained 3-3/4 cents, or 0.45 percent, at $8.43-1/2 a bushel. Front-month CBOT wheat lost more than 8 percent in the previous three sessions, the biggest three-day loss since July last year.
Dealers said the market remained supported by tightness in supplies of Russian wheat and the possibility that some kind of export controls may be imposed in the next few weeks.
Russia's exportable grain surplus of 10-11 million tonnes could run out by November if the country retains a high pace of shipments in coming months, SovEcon agricultural analysts said, fanning fears about export limits.
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