U.S. grains: Oats hit record high, soy climbs on exports, corn flat

Chicago | Reuters — Chicago Board of Trade soybean futures rose for a sixth straight session on Thursday, setting a six-week high on strong export demand for U.S. soybeans and soymeal, traders said.

Thinly-traded CBOT oats surged, with the March contract soaring its daily 20-cent limit to $4.63-1/4 per bushel, the highest-ever spot oats price (all figures US$). The contract settled at $4.56-1/2.

CBOT corn finished roughly unchanged as farmer selling erased gains after an export-driven rally took prices to the highest level in three months, above $4.45 a bushel.

CBOT wheat fell, pausing after a five-session recovery rally that followed the market’s slide to a 3-1/2 year low last week.

But problems with grain logistics in Canada, including severe railroad delays, buoyed spring wheat futures in Minneapolis and sent the price of CBOT oats above corn for the first time in eight years.

At the CBOT, the March soybean contract settled up 9-1/2 cents at $13.25-3/4 per bushel after hitting $13.34-1/2, its highest since late December.

March corn ended down 1/4 cent at $4.43 a bushel, and March wheat ended down 6-3/4 cents at $5.80-3/4 a bushel.

Soybeans climbed after the U.S. Department of Agriculture reported weekly export sales of U.S. soybeans at the high end of trade expectations, with only a few cancellations.

Worries that top buyer China might cancel some purchases of U.S. soy or switch the origin to South America hung over the market in recent weeks. But so far, widespread cancellations have yet to materialize.

USDA pegged weekly sales at a net 577,000 tonnes for 2013-14, including 436,400 tonnes to China.

U.S. soybean sales so far have exceeded USDA’s export forecast of 1.495 million bushels for the 2013-14 marketing year that began Sept. 1, 2013.

“This (is) giving the trade the idea that yearly export projections will likely be raised,” said Karl Setzer, an analyst at MaxYield Cooperative in West Bend, Iowa.

USDA is scheduled to revise its forecasts in a monthly report on Feb. 10.

CBOT soyoil futures also rose sharply, rebounding on ideas the market was oversold after falling to a multiyear low last week. The spot soyoil contract, which ended up 0.43 cent at 38.66 cents per lb, is on track for its biggest weekly gain since October.

Corn flat after farmer selling halts rally

Spot CBOT corn ended nearly flat after reaching as high as $4.47-1/4 a bushel, the highest price on a continuous chart since October. The rise above $4.40 this week, driven by robust U.S. export sales, triggered farmer selling.

U.S. farmers harvested a record-large corn crop in 2013 of nearly 14 billion bushels, but chose to store much of it after prices fell toward $4 a bushel, from around $7 last summer.

Because of the big U.S. corn supply, “$4.50 is going to be a tough nut to crack,” said Jim Gerlach, president of A/C Trading in Fowler, Indiana, citing a key level of price resistance.

“We are seeing a pickup in producer sales,” Gerlach said.

Export demand remains strong. USDA reported weekly export sales of U.S. corn at 1.7 million tonnes, far exceeding trade expectations for a second straight week.

But USDA also said Thursday through its daily reporting system that private exporters canceled 220,000 tonnes of U.S. corn sold to China.

Oats, spring wheat surge

CBOT March wheat fell on a technical setback that interrupted a five-session rally tied to fund short-covering and worries about the condition of the U.S. winter wheat crop.

However, Minneapolis Grain Exchange spring wheat futures were higher, with the March contract up 8-3/4 cents at $6.38-1/4 a bushel, gaining against back months on spreads.

The rally in oats took the price above that of front-month corn for the first time in eight years.

Oats and spring wheat drew support from problems with grain movement in Canada, a major producer of both grains. A severe backlog in moving Western Canadian crops to ports has racked up shipping penalties for grain handlers and left farmers with few buyers.

“We rely on Canada almost exclusively for our oat needs, and half the oats that we use go straight into the food chain,” Gerlach said.

“It’s got very inelastic demand. People pay what they have to pay,” Gerlach said, referring to end-users.

— Julie Ingwersen is a Reuters correspondent covering ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Nigel Hunt in London.

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