U.S. grains: Bargain buying boosts soy futures

Chicago | Reuters — U.S. soybean futures rose on Tuesday, bouncing back from a sharp decline in a round of bargain buying after prices sank in the previous session to their lowest since Nov. 8, traders said.

Wheat futures were mixed with short-covering boosting the most-active soft red winter wheat contracts after prices traded near three-week lows overnight. But hard red winter wheat contracts fell. Corn also closed slightly lower, pressured by outside markets.

“Fundamentally, there is nothing changed, said Jim Gerlach, president of A/C Trading. “I think they probably overdid it a little bit on Monday.”

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Weakness on Wall Street, a strong dollar and a sharp drop crude oil prices cast a bearish tone across the agriculture sector, keeping gains in check with investors in a risk-off mode.

“Any commodity is going to have a hard time rallying,” Gerlach added.

Chicago Board of Trade (CBOT) January soybean futures settled up 7-1/4 cents at $8.81 a bushel after hitting a high of $8.85-3/4 during the session (all figures US$).

Soybeans received additional support from the U.S. Department of Agriculture’s announcement that private exporters reported the sale of 123,567 tonnes of soybeans for delivery to unknown destinations during the 2018-19 marketing year.

CBOT soft red winter wheat for December delivery ended 2-1/4 cents higher at $5.00-3/4 a bushel. K.C. December hard red winter wheat dropped 1-1/4 cents to $4.73 a bushel after hitting a fresh contract low of $4.69-3/4 a bushel.

Wheat markets are still waiting for the time when Russian export supplies start selling out and global export demand shifts to the United States, said Matt Ammermann, commodity risk manager with INTL FCStone.

“There is still no sign of this and Russian wheat remains cheap in export markets,” Ammermann said.

CBOT December corn dropped one cent to $3.61-1/4 a bushel after trading in a narrow range throughout the session.

USDA said private exporters reported the cancellation of 2018-19 corn sales totaling 200,588 tonnes to unknown destinations.

The U.S. dollar rallied from a two-week low on Tuesday as a sell-off in world stock markets spurred safe-haven bids and investors worried about slowing global growth.

A strong dollar dampens enthusiasm for U.S. grains from investors looking for a hedge against inflation. It also makes U.S. supplies relatively more expensive to buyers on the export market.

— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Colin Packham in Sydney and Michael Hogan in Hamburg.

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