U.S. grains: Soybeans bounce from 6-1/2 year lows

(Scott Bauer photo courtesy ARS/USDA)

Chicago | Reuters –– U.S. soybean futures firmed on Monday, rising from 6-1/2 year lows on bargain-buying as investors covered bearish bets amid signs of strong export demand, traders said.

Corn futures also closed higher, with traders citing a round of short-covering.

The gains in both commodities were kept in check by pressure from burgeoning stocks as U.S. farmers wrapped up the harvest.

In early trading, concerns about political upheaval in key soy exporter Argentina pushed prices to their lowest since March 2009 before the market turned higher.

“Beans started the overnight down slightly off anticipation that the pro-business candidate would win the Argentine election next Sunday, but came back on short-covering from oversold technicals,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital, said in a note to clients.

Wheat futures were mixed, with Chicago Board of Trade soft red winter wheat contracts easing on poor export demand, while higher-protein MGEX spring wheat and K.C. hard red winter wheat contracts firmed on concerns about weather in the Black Sea region.

CBOT January soybean futures settled up 4-1/4 cents at $8.59-1/2 a bushel, just below session highs (all figures US$). CBOT December corn was 1-3/4 cents higher at $3.59 a bushel.

Both crops touched contract lows last week after the U.S. Department of Agriculture raised its outlook for U.S. productions and stocks.

Chicago Board of Trade December wheat ended down 1-3/4 cents at $4.94 a bushel. K.C. December hard red winter wheat was two cents higher at $4.67-1/2 a bushel, while MGEX December spring wheat was up 1/2 cent at $5.04-3/4 a bushel.

A firm dollar also contributed to the generally bearish tone hanging over grain markets. A stronger dollar pressures commodities priced in the U.S. currency as it makes them more expensive for overseas buyers.

“The dollar strength is certainly adding downward pressure to wheat prices, but the other elephant in the room is fundamentals, which are very good,” said Phin Ziebell, agribusiness economist at National Australia Bank.

Wheat has also come under pressure from rain providing relief for dry U.S. growing belts, although traders remain concerned that drought in Ukraine and Russia, also major exporters, could significantly cut next year’s production.

The U.S. Agriculture Department on Monday morning said weekly export sales of soybeans totaled 2.161 million tonnes, above the high end of the range of market forecasts. Corn and wheat inspections were lower than expected.

Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Gus Trompiz in Paris.

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