U.S. grains: Soy futures follow rally in soymeal

CBOT January 2020 soybeans (candlesticks) with January 2020 soymeal (yellow line). (Barchart)

Chicago | Reuters — U.S. soybean futures rose on Thursday for the third straight day, led higher by strength in the soymeal market stemming from news that an Argentine soy crusher was experiencing financial stress, traders said.

Corn futures ended lower after trading close to unchanged for much of the day, while wheat dropped on signs of weak export demand for U.S. supplies.

The troubles at Argentine soy crusher Vicentin, which said in a statement on Thursday it had begun a payment restructuring process because of “financial stress,” could tighten up world supplies of soymeal. A source close to the firm said the company was struggling to repay over $350 million in debt (all figures US$).

Chicago Board of Trade January soymeal futures rose 1.7 per cent on Thursday, hitting their highest level in nearly two weeks.

CBOT soybeans for January delivery ended up 6-1/4 cents at $8.84-1/4.

Signs of a pickup in overseas demand for U.S. soybeans also contributed strength to the soy market.

The U.S. Agriculture Department said on Thursday morning that private exporters reported the sale of 245,000 tonnes of soybeans to unknown destinations, involving 125,000 tonnes for delivery in the 2019-20 marketing year and 120,000 tonnes for delivery in 2020-21.

“We’ve also had a couple of private sales of beans this morning,” said Brian Hoops, president of Midwest Market Solutions. “That’s the first time in three weeks. That’s a supportive feature in soybeans.”

But a USDA report showed weekly export sales of soybeans totaled just 683,800 tonnes, a six-week low. Analysts’ forecasts had ranged from 700,000 tonnes to 1.3 million tonnes.

Uncertainty about a trade deal with China also kept soybean gains in check.

U.S. President Donald Trump said on Thursday the United States was having meetings and that discussions with China were going well.

But the Chinese commerce ministry said tariffs must be cut if China and the United States are to reach an interim agreement.

CBOT March soft red winter wheat futures were down 3-3/4 cents at $5.23-3/4 a bushel. CBOT March corn was down 1-3/4 cents at $3.76-3/4 a bushel.

Wheat export sales of 228,100 tonnes were the lowest since mid-June and also below a range of market forecasts. Corn export sales came in at 548,500 tonnes, near the low end of estimates that ranged from 500,000 tonnes to 900,000 tonnes.

Grain markets were beginning to shift their attention toward USDA’s monthly supply and demand report on Tuesday.

Reporting for Reuters by Mark Weinraub; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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