US soybean futures rose nearly 2.5 percent in early trading at the Chicago Board of Trade on Friday as competition heated up to buy limited supplies ahead of harvest, traders said. Tight supplies in the United States, the world's top soy grower and exporter, drove the market even as Argentine farmers began a strike protesting export taxes.
"Tight old crop stockpiles combined with robust demand continues to dominate the soybean market's psychology," said Peter McGuire, managing director of CWA Global Markets in Sydney. The eight-day strike in Argentina halted grain and cattle sales in one of the world's biggest suppliers of corn, beef and soybeans. US traders and analysts said the strike will have no immediate impact on global soybean trade as the bulk of this year's crop has already been shipped.
Still, memories of a months-long disruption in 2008 linger in the markets. Steady soy buying by China also has added strength to the futures market despite forecasts for a record US crop this fall. Private exporters reported the sale of another 110,000 tonnes of US soybeans to China for delivery during the 2009/10 marketing year, the US Agriculture Department said on Friday morning.
At 9:36 am CDT (1436 GMT) Chicago Board of Trade soybeans for September delivery were up 27-3/4 cents at $11.42 a bushel, while new crop November soy gained 1.4 percent to $10.09-3/4. For the week, the nearby contract was up about 11.6 percent. "It is all September beans, that is the game," a CBOT floor trader said.
CORN, WHEAT PRICES ALSO RISE Corn prices edged higher due to strength in soybeans, but the market remained subdued by favourable growing weather in the United States, which underscores the US Agriculture Department's forecast of a bumper crop this year. CBOT September corn was up 1-1/2 cents at $3.24-1/2. On wheat markets, CBOT wheat for September delivery gained 3 cents to $4.78 a bushel, while November wheat on Euronext was up 0.25 euro at 129.75 euros a tonne.
Despite some buying following recent lows, traders remained bearish about wheat in view of swelling supplies and uncertain export demand. "The market is holding up surprisingly well in the face of the heavy fundamentals," one Euronext trader said, adding the return of some silo directors from holidays could trigger a fresh wave of selling next week, especially with storage space still tight ahead of the maize and sunseed harvests.
The European Union's announcement of nearly 300,000 tonnes of wheat export licenses this week was considered a healthy level. But this was not enough to shake off negative sentiment about the large surplus, particularly with Egypt overlooking French grain in its latest tender this week, operators said. "It's a necessity to have this level of exports. But by not falling, European wheat is losing competitiveness against other origins that are more reactive," an exporter said.