U.S. grains: Soybeans soar to contract highs on demand, tight supplies

Chicago | Reuters — U.S. soybeans rallied for a second straight session on Thursday, with old-crop futures hitting contract highs as relentless demand stoked worries about shrinking short-term supplies in the U.S.

Corn edged higher after hitting an 11-week low in the previous session on spillover support from soybeans, but prices remained anchored by favourable weather in the U.S. Midwest that allowed farmers to wrap up planting of this year’s crop.

Wheat slumped to a 10-week low on technical selling and weak demand for U.S. wheat, while signs of improving crop weather in the U.S. wheat belt further weighed on prices.

Soybeans climbed more than three per cent in two days, fuelled by steady export demand and a soaring soymeal market, which posted across-the-board contract highs on Thursday.

“The fact that soybean export sales weren’t negative is beneficial and we saw another good round of soybean meal as well, which is quite supportive,” said Sterling Smith, a futures specialist at Citigroup.

The U.S. Department of Agriculture said exporters sold a net 615,600 tonnes of U.S. soybeans last week, including 164,400 tonnes of old-crop supplies, and 350,300 tonnes of soymeal, the most in nine weeks.

Additionally, USDA confirmed on Thursday the private sale of 120,000 tonnes of new-crop U.S. soybeans to China, the world’s top soybean importer.

The soy complex also got a lift from China’s factory sector, which posted its best performance in five months in the HSBC Flash China Manufacturing Purchasing Managers’ Index for May.

Chicago Board of Trade July soybeans gained 13-1/2 cents, or 0.9 per cent, to $15.18-3/4 a bushel after earlier hitting a contract high of $15.36-3/4, the loftiest level for a spot contract since July 2013 (all figures US$). The August and September contracts also posted contract highs.

CBOT July corn added 2-1/4 cents, or 0.5 per cent, to $4.76-3/4 a bushel, holding above its 200-day moving average of $4.73.

Soybeans’ gains lifted corn as the ratio between the new-crop November soybean contract and the new-crop December corn contract, which could influence farmers’ planting decisions this spring, widened to its highest of the season.

Comfortable global wheat supplies and stiff competition in export markets for U.S. supplies dragged wheat futures lower, with CBOT July wheat shedding five cents, or 0.8 per cent, to $6.59-1/4 a bushel.

Technical selling below the contract’s 200-day moving average of $6.58 a bushel dragged prices to the lowest since March 11.

Commodity funds bought an estimated net 5,000 soybean contracts and 3,000 corn contracts on the day and sold a net 2,000 wheat contracts, trade sources said.

— Karl Plume reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Colin Packham in Sydney, Naveen Thukral in Singapore and Gus Trompiz in Paris.

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