U.S. grains: Soybeans extend rally on Chinese demand

Wheat down as Australia lifts harvest forecast

CBOT November 2020 soybeans with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. soybean futures rose on Tuesday to notch an 11th-straight higher daily close, supported by a mix of chart-based buying, continued demand from top global buyer China and worries about U.S. crop potential, analysts said.

Corn futures also climbed while wheat futures fell as larger harvests in Australia signalled greater export competition for U.S. supplies.

Chicago Board of Trade November soybean futures settled up five cents at $9.73 per bushel after reaching $9.77, the highest price on a continuous chart of the most-active soybean contract in more than two years (all figures US$).

CBOT December corn ended up 3-3/4 cents at $3.61-3/4 a bushel. December wheat ended down six cents at $5.44-1/4 a bushel.

Soybeans drew support from the U.S. Department of Agriculture’s confirmation on Tuesday that Chinese buyers purchased 664,000 tonnes of U.S. soybeans, the latest in a string of purchases by China, which vowed to import record amounts of U.S. agricultural goods this year under a Phase One trade deal.

U.S. soybean exports to China typically rise this time of year as flows from top supplier Brazil run low.

“From now until the first of January… we are the only game in town, and the Chinese are buying,” said Don Roose, president of Iowa-based U.S. Commodities.

Signs of declining U.S. crop prospects lent support. After the CBOT close, USDA rated 61 per cent of the corn crop in good-to-excellent condition, down one percentage point from the previous week and matching the average of expectations in a Reuters survey.

Soybean ratings declined to 65 per cent good-to-excellent, also down one point from a week earlier, while analysts on average had expected a two-point decline.

Analysts expect the USDA to lower its U.S. soy and corn production estimates in monthly supply/demand reports due on Friday.

Wheat futures fell on news that the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) raised its estimate of the country’s wheat crop to 28.91 million tonnes, up from its June estimate of 26.67 million tonnes.

Traders also cited a firmer dollar, which tends to make U.S. wheat less competitive globally.

— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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