Chicago | Reuters — U.S. soybean futures weakened on Monday on forecasts for some much-needed rain in dry parts of Argentina’s growing areas, traders said.
Wheat and corn futures closed higher, with wheat receiving support from improving export hopes for U.S. supplies, traders said. Both grains traded in negative territory before buyers stepped in to the market.
“Wheat started down overnight, erasing part of the Friday late run up which appeared to be pre-hedging for the weekend Saudi tender, but came back on talk that the U.S. would do a big portion of the biz,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital, said in a note to clients. .
Read Also
U.S. grains: Corn rebounds from contract lows on short covering, bargain buying
Bargain buying and short covering lifted U.S. corn futures on Monday after the market slid to contract lows on expectations for strong U.S. output, traders said.
Saudi Arabia’s main state grain importer, the Saudi Grains Organization (SAGO), said on Monday it had bought 725,000 tonnes of hard wheat. Traders said they expected part of the purchase to be sourced in the U.S., which has struggled to gain traction in the wheat export market as cheaper supplies have been readily available from other countries.
CBOT March soft red winter wheat futures settled up one cent at $4.17-1/4 a bushel while CBOT March corn gained one cent to close at $3.60-1/2 a bushel (all figures US$).
Technical buying also let support to both corn and wheat when they hit session lows. Snow during the weekend in key U.S. growing areas eased concerns about winterkill damaging the wheat crop when sub-freezing temperatures hit the Midwest in the coming days, limiting the rebound.
“Winterkill risk limited by snow for eastern Midwest wheat this week,” Commodity Weather Group said in a note to clients.
CBOT January soybean futures dropped 6-1/2 cents to close at $10.31 a bushel.
Traders shrugged off news of a fresh sale of 256,600 tonnes of U.S. soybeans to China as the world’s largest buyer of the oilseed is expected to turn its attention to South America in the coming months when what is forecast to be a huge crop is harvested there.
A weekly report from the U.S. Agriculture Department that showed better-than-expected soybean export inspections also offered little support.
Rain in the forecast for key producer Argentina added to the bearish tone hanging over soybeans.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.
