Chicago | Reuters — U.S. soybean futures rallied more than three per cent to a five-week high on Thursday on robust export demand and tight cash market supplies, with late-session technical buying adding to gains.
Corn futures gained nearly two per cent and wheat climbed to a 1-1/2 month high on spillover strength from soybeans.
“There’s some renewed excitement in soybeans after the weekly sales report. There’s also some building concern that USDA may be lowering ending stocks in next month’s report, raising exports and crush,” said Rich Nelson, chief strategist with consultancy Allendale Inc.
Gains were kept somewhat in check by forecasts for mostly dry weather across the U.S. Midwest that will allow for a pickup in the harvest pace of both corn and soybeans and flood cash market dealers with much-needed supplies.
Both corn and soybeans had drawn support earlier in the week after the U.S. Department of Agriculture (USDA) confirmed that the progress of the harvest was behind previous years.
Chicago Board of Trade November soybean futures jumped 30-1/2 cents, or 3.2 per cent, to $9.93-1/4 a bushel, its strongest gain in 2-1/2 weeks (all figures US$). Buying accelerated as the contract rose above its 50-day moving average of $9.79.
CBOT December corn rose 6-3/4 cents, or 1.9 per cent, to $3.59-3/4 a bushel. CBOT December wheat gained 4-1/2 cents, or 0.9 per cent, to $5.26-3/4 a bushel after notching a 6-1/2 week peak of $5.30-3/4 earlier in the day.
Commodity funds bought an estimated net 10,000 soybean contracts on the day, along with 8,000 corn contracts and 2,000 wheat contracts, trade sources said.
Soybeans drew additional support from sharply higher soymeal futures, which gained more than four per cent on strong cash markets amid tight supplies in the eastern Midwest.
Additional support in wheat stemmed from worries about cold weather in Russia slowing germination of the newly planted winter crop.
USDA said on Thursday morning that weekly export sales of soybeans were a better-than-expected 2.167 million tonnes. Corn export sales were 1.031 million tonnes, also above market expectations.
USDA also reported on Thursday morning that exporters sold 118,000 tonnes of U.S. soybeans to China. That followed announcements of sales of 532,000 tonnes on Wednesday, all for delivery in 2014-15.
Dry conditions in South American growing regions added strength to soybean futures although updated weather models call for more favourable conditions, limiting the gains.
Parts of Brazil are dry, but meteorologists said widespread rains should extend over all of the country’s grain, coffee and sugar-growing areas next week.
Brazil’s soy planting is 10 per cent complete for the 2014-15 crop, the slowest for this time of year since the 2008-09 season, consultancy AgRural said on Monday.
— Karl Plume reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Mark Weinraub in Chicago, Colin Packham in Sydney and Sybille de La Hamaide in Paris.