U.S. grains: Soybeans and corn firm, led by crude oil

(FIle photo by Allan Dawson)

Chicago | Reuters — U.S. soybean futures rose on Wednesday on technical buying, export demand and spillover strength from crude oil, analysts said.

Corn tracked soybeans higher while wheat settled modestly firmer after a choppy session.

At the Chicago Board of Trade, November soybeans settled up nine cents at $9.81-1/2 a bushel (all figures US$). December corn ended up 3-3/4 cents at $3.57-1/2 a bushel. December wheat settled up 1/4 cent at $4.20-1/4 a bushel.

Soybeans and soyoil futures drew support as U.S. crude oil futures hit 15-month highs after the government reported a surprisingly large drop in domestic inventories.

Soyoil is tied to energy markets because of its use as feedstock for biodiesel fuel.

Soybeans drew additional support after the U.S. Department of Agriculture confirmed that private exporters sold 185,000 tonnes of U.S. soybeans to unknown destinations for delivery in the 2016-17 marketing year.

“You are looking at a market that has seen this big rally in crude. Our demand is holding in, and there’s no farmer selling,” said Jack Scoville, analyst with the Price Futures Group in Chicago.

“We had the 185,000 tonnes of soybeans (sold), which is not a big surprise, but still it’s new business,” Scoville said.

The CBOT November soybean contract broke through chart resistance at its 200-day moving average as it bounced back from a weak close one day earlier.

CBOT December corn stayed in the same trading it has plied all week, hovering just below its 100-day moving average and a multi-month high set Oct. 14 at $3.58-3/4 a bushel.

The firm tone was impressive, given the fact that U.S. farmers are in the thick of the harvest of record-large soybean and corn crops.

“The surprise continues to be a pretty resilient grain market complex; the grains could have easily given up hope against technical resistance and an overwhelmingly bearish supply situation that continues to build,” INTL FCStone chief commodities economist Arlan Suderman wrote in a note to clients.

Corn drew support from bullish weekly data on ethanol, which is made from corn. The U.S. Energy Information Administration said that ethanol production last week increased by 36,000 barrels per day while stocks of the biofuel fell by 351,000 barrels.

Wheat futures finished modestly higher. Commodity funds hold a large net short position in CBOT wheat, leaving the market vulnerable to periodic short-covering rallies.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Michael Hogan and Naveen Thukral.

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