US soyabean futures snapped a three-day slide on Tuesday, rallying on bargain buying, firm cash markets and talk of Chinese demand, traders said. Corn futures firmed on technical buying after a six-day sell-off while wheat fell for a fourth day as traders unwound on inter-market spreads.
"Yesterday was overextended, especially in the beans. The outside markets (today) are supporting us here. The weaker dollar is giving us a chance to recover," said Art Liming, futures specialist with Citigroup in Chicago. At the Chicago Board of Trade, most-active January soyabeans settled up 6-3/4 cents, or 0.4 percent, at $15.36-1/2 per bushel. December corn ended up 4-3/4 cents at $7.41-3/4 a bushel while December wheat fell 1-1/4 cents at $8.56-3/4 a bushel.
Soyabeans pared gains toward the close as investors took profits and rolled long positions forward, one day ahead of first notice day for deliveries against the November contract. Early support stemmed from talk that China was buying more US soyabeans, given that front-month CBOT futures have fallen 14 percent from their all-time high of $17.94-3/4 set in early September.
"The rumours are very strong that China is buying more and more beans on this break. Crush margins in China are negative right now, but this doesn't seem to make much difference," said Bill Gary, president of Commodity Information Systems in Oklahoma City, Oklahoma. Also bullish were ideas that the South American crop currently being planted might not be as large as initially expected. The grains trade is counting on a bumper South American crop to replenish global supplies after drought cut the latest soya harvests in the United States and South America.
Michael Cordonnier, president of Soyabean and Corn Advisor, lowered his forecast of 2012/13 Brazilian soyabean production to 80 million tonnes, from his previous estimate of 81 million to 83 million. The US Department of Agriculture currently projects Brazil's crop at 81 million tonnes. Hamburg-based oilseeds analyst Oil World cautioned that rain delays could reduce soya plantings in Brazil and Argentina. In Argentina, economist and agricultural consultant Manuel Alvarado Ledesma said heavy rains and flooding in the country's farm belt would curtail corn and soyabean production.