US soyabeans hit fresh two-week highs on Wednesday as traders scrounge around for supplies, with some US farmers waiting for better prices and the just-started South American harvest yet to hit the market in a major way. But the rally may not last long, with supplies from South America gearing up as a bumper harvest there gathers momentum.
Despite the recent price rises, soyabeans are still trading below the $10 per bushel they fetched at the start of the year. Corn futures also rose, dragged higher by the gains in soyabean futures and rumours that a big commercial grain company would cancel contracts of corn registered for delivery against Chicago Board of Trade (CBOT) futures.
Several CBOT floor traders and analysts said Archer Daniels Midland Co was buying back its delivery certificates for corn in the cash market, which would allow the company to cancel contracts registered for delivery.
Large global supplies of wheat pushed the grain's price lower after wheat futures were supported by technical buying on Tuesday by funds holding short positions. Trading is likely to remain in a narrow range ahead of a spate of US economic data due later on Wednesday. As well, US Federal Reserve chairman Ben Bernanke testifies on the economic outlook before the Joint Economic Committee.
FUNDAMENTALS There is nothing friendly for corn futures on a fundamental basis with the weather in the US Midwest cornbelt favourable for corn-planting progress. Trade house FCStone expects 20 to 25 percent of the US crop to be planted by next Monday, up from 3 percent last Monday. The nearby soyabean contract has gained on deferred months recently as elevators and processors were willing to pay a premium to take ownership of soyabeans now. The spread between the two contracts narrowed slightly on Tuesday but some traders expected the disparity to grow in coming weeks.