Chicago | Reuters — U.S. soybean futures climbed to a six-week high on Monday on concerns about tightening old-crop supplies and excessive rains trimming new-crop yield prospects, traders said.
Wheat and corn also rose.
At the Chicago Board of Trade, the July soybean contract settled up 18 cents at $9.89-1/2 per bushel after reaching $9.90, its highest level since May 6 (all figures US$). July wheat ended up 12-3/4 cents at $5.01-1/4 and July corn rose 6-3/4 cents at $3.60 a bushel.
Traders have begun positioning ahead of the U.S. Department of Agriculture’s June 30 reports on U.S. acreage and quarterly grain stocks. Analysts are factoring in a bullish soybean outlook.
“We are getting too much wet weather, and we have got the possibility that grain stocks at the end of the month are not going to be what they thought,” said Jim Gerlach, president of A/C Trading in Fowler, Indiana.
Robust demand from domestic processors has been drawing down U.S. soybean supplies, Gerlach said. Also, some analysts suspect USDA may have overstated the size of the U.S. 2014 harvest.
CBOT soybeans and soymeal drew support from the threat of a port workers’ strike in Argentina’s Rosario grains hub, but the workers reached a deal later Monday, reportedly including a 31.5 per cent wage increase.
Analysts expected USDA’s weekly crop progress report to show a deterioration in U.S. corn and soybean ratings due to excessive rains.
After the CBOT close, those suspicions were confirmed as the USDA rated 65 per cent of the U.S. soybean crop as good to excellent, down from 67 per cent a week earlier. Corn was rated 71 per cent good to excellent, down from 73 per cent previously.
CBOT corn followed soybeans higher, but expectations for a big U.S. harvest anchored prices. Corn is more mature than soybeans and is seen as better able to withstand recent Midwest rains.
“Weather forecasters continue to expect a benign to helpful outlook for U.S. corn crop,” Commonwealth Bank of Australia analyst Tobin Gorey said in a note.
Wheat firmed, settling above $5 a bushel for the first time in a week on technical buying and harvest delays in the Midwest. Funds hold a sizable net short position in CBOT wheat, leaving the market open to short covering.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Sybille de La Hamaide in Paris and Naveen Thukral in Singapore.