U.S. grains: Soybeans firm on tight supplies, wheat hits three-month low

(Lisa Guenther photo)

Chicago | Reuters — U.S. soybean futures rose on Monday on signs of strong export demand that threatened to further deplete thin U.S. supplies, traders said.

Corn was close to unchanged, with good crop weather pressuring prices, while wheat futures sagged to a three-month low on ample global stocks and lacklustre demand. CBOT wheat has fallen for nine straight days and in 17 of the last 18 sessions.

Tight U.S. soybean supplies, combined with expectations of a huge harvest this fall amid forecasts for good crop weather in the Midwest, led investors to add to bull spreads. The spreading pushed the front-month soybean contract above $15 a bushel while new-crop months were close to unchanged (all figures US$).

Corn prices followed a similar pattern. The U.S. Agriculture Department will release its first ratings for the recently seeded corn crop on Monday afternoon. Analysts expected USDA to show good-to-excellent ratings for corn at 70 per cent.

“This weather continues to benefit most of the U.S. crop,” Matt Zeller, director of market information at INTL FCStone, said in a note to clients. “Early-season prospects couldn’t be shaping up much better.”

Soybean prices surged to session highs after USDA said weekly export inspections of the oilseed were a better-than-expected 156,364 tonnes.

The benchmark Chicago Board of Trade July soybean futures contract settled up 7-1/4 cents at $15.00-1/2 a bushel.

CBOT July corn eased 1/4 cent at $4.65-1/2 a bushel, and CBOT July wheat was 4-3/4 cents lower at $6.20-3/4 a bushel. The front month contract bottomed out at $6.16-1/4, its lowest since hitting $6.08-1/4 on March 3.

Weekend rains in the southern U.S. Plains and forecasts for more precipitation this week may help heading and maturing hard red winter wheat crops in some areas.

The improving U.S. picture has reinforced a bearish mood in the wheat market, with good crop conditions across Europe and promising sowing prospects in Australia and Argentina.

Favourable weather in May has also brightened prospects for the 2014 grain harvest in Russia and Ukraine, easing risks related to the lack of financing available for sowing, analysts and traders said.

Russia and Ukraine have already clinched a series of new-crop export sales deals, putting further pressure on U.S. prices.

— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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