U.S. grains: Soy surges on concerns over Argentina soymeal

(Scott Bauer photo courtesy ARS/USDA)

Reuters — U.S. soybean futures jumped three per cent on Wednesday, the biggest gain for the most-active contract in two weeks, boosted by concerns about a possible shortage of soymeal from Argentina.

U.S. wheat futures rose on short-covering and forecasts of unfavourable rain in the U.S. Plains grain belt, while corn advanced to a one-month high on technical buying.

Chicago Board of Trade July soybeans gained 30-3/4 cents at $10.85-1/2 a bushel, touching a one-week high (all figures US$). Front-month soymeal, an ingredient in livestock feed, rose above $400 per short ton for the first time since December, 2014.

“It’s all on the meal market,” said Bill Gary, president of Commodity Information Systems. “It seems like everyone waited to buy meal (and) didn’t buy ahead. Now they’re getting caught with no coverage and are forced to pay up.”

The temporary shutdown of an Archer Daniels Midland soybean-processing plant in Indiana added to soymeal supply concerns, Gary said.

In April, there was flooding in key farm areas in Argentina, the world’s third-largest exporter of unprocessed soybeans and biggest exporter of soymeal. As a result, Argentina’s Rosario grains exchange cut its forecast earlier this month for the current soybean harvest.

Argentine soybean exports could fall by as much as 25 per cent this year.

Limited rains through the weekend in Argentina should aid harvesting of soybeans and corn, senior agricultural meteorologist Donald Keeney of MDA Information Systems, said in a report.

Chicago July wheat added two cents, or 0.4 per cent, to $4.66 a bushel.

“We have something of a weather market today,” said ABN AMRO Bank agrifood economist Frank Rijkers. “Wheat is being supported by concern about rain in parts of the United States, which threatens to damage the wheat crop at this stage of its growth.”

Forecasts of persistent showers in east central and southeastern areas of the U.S. Plains through the weekend are likely to extend worries for the maturing winter wheat crop, Keeney said.

Chicago July corn gained 7-1/4 cents, or 1.9 per cent, to $4.04-3/4 a bushel, helped by technical buying, strong export prospects and spillover strength from soybeans, traders said.

Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg. Additional reporting for Reuters by Julie Ingwersen in Chicago, Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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