Chicago / Reuters – U.S. soybean futures gained for the second straight session on Wednesday on short-covering and worries about dry weather conditions in the key crop development month of August, traders and analysts said.
Corn futures also rose at the Chicago Board of Trade, primarily on bargain buying, while wheat was narrowly lower.
CBOT soybeans bounded to session highs after the U.S. Department of Agriculture said at midmorning that exporters sold 131,000 tonnes of U.S. soybeans to top global importer China.
Most-active CBOT November soybeans settled 12-1/4 cents higher at $9.86 per bushel, capping only the second two-day streak of gains seen this month after hitting three-month lows on Monday.
“Some (meteorologists) say August is going to have a warmer and drier bias, and a little export business was announced. You put it all together, you get a little short-covering,” said Tom Fritz, an analyst at brokerage EFG Group.
Prices for both soybeans and corn have declined during much of July as frequent rain showers resulted in good growing conditions and historically high U.S. crop condition ratings.
Much of the corn crop has gone through its crucial phase of pollination with minimal stress while soybean plants will need rains throughout the coming month to boost yields as bean pods form and soybeans are filled.
“We’re putting a little premium back into the price for a safeguard for what August weather may or may not be,” Fritz said.
Some weather models showed a potential change to less precipitation in the Midwestern crop belt in the six- to 10-day and 11- to 15-day forecasts, according to the Commodity Weather Group.
CBOT December corn finished 3-1/2 cents higher at $3.43 per bushel, rebounding from last week’s 21-month lows.
CBOT September wheat fell 1/4 cent to $4.14-3/4, holding above recent nine-year lows. CBOT wheat had traded higher for much of Wednesday’s session before edging lower late, in sympathy with a 1.8 per cent drop in Euronext wheat futures .
“The rise in Paris to six-month highs on Monday had brought hopes of more export sales for U.S. wheat,” said Frank Rijkers, agrifood economist at ABN AMRO Bank. “But these are fading as Paris falls and there are also indications of strong Russian wheat exports.”
Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Sinagpore; Editing by Richard Chang and Diane Craft