US soyabean futures rose nearly 1 percent on Tuesday from 3-1/2-month lows the previous session, aided by a weak dollar, bargain buying and signs of Chinese purchases at cheaper prices. Corn and wheat also rose, with each commodity recovering from two consecutive days of declines tied to investor long-liquidation from record-high prices reached during a drought-fuelled buying spree.
The worst drought in more than 50 years trimmed US corn and soyabean production prospects over the summer, leading to the fund purchasing and price bulge. Markets are now adjusting or correcting from that buying euphoria. "The focus is on beans. They're trying to find support and/or stabilise around the $15 level and there are rumours China bought three to five cargoes of beans," said Rich Nelson, chief strategist for Allendale Inc.
The US Department of Agriculture (USDA) on Tuesday reported a sale of 110,150 tonnes of US soyabeans to an unknown destination. Traders said the sale likely was made to China, the world's biggest buyer of soyabeans. Chicago Board of Trade (CBOT) November soyabeans were up 12 cents per bushel at $15.04-1/2 by 9:27 am CDT (1427 GMT). December corn rose 6-1/4 cents to $7.43-1/2 and December wheat gained 6-1/2 at $8.54-3/4.
Soyabean futures have tumbled 16 percent from the all-time high of $17.94-3/4 a bushel set on September 4, while corn has declined 12 percent from its peak of $8.43-3/4 a bushel on August 10. Investor liquidation of long positions and profit-taking on Monday drove the bellwether November soyabean contract to a 3-1/2-month low and into oversold territory on technical charts. The nine-day relative strength index, a barometer of oversold or overbought technicals, fell on Monday to 27.6, below the benchmark 30 level generally considered an oversold point.