U.S. grains: Soybeans up on export demand, month-end position-squaring

Strong weekly U.S. export sales data also supports corn, wheat

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

Chicago | Reuters — U.S. soybean futures rose more than two per cent on Thursday, the biggest single-day advance in a month, on strong weekly export sales and news of fresh demand from top global soy buyer China, analysts said.

Corn futures firmed for a second day on strong export sales and signs the worst impacts of the collapse in the ethanol sector may have passed.

Wheat rallied from a six-week low, rebounding on better-than-expected weekly U.S. export data and worries about tightening global supplies.

Chicago Board of Trade July soybeans settled up 17-3/4 cents at $8.55-1/4 per bushel and July corn ended up 5-1/2 cents at $3.20 a bushel (all figures US$).

CBOT July wheat finished up 7-3/4 cents at $5.24-1/4 a bushel, rallying after dipping to $5.06-3/4, its lowest since March 18.

Soybeans posted the day’s biggest advance on a percentage basis.

“Weekly export sales were really solid across the board… there is a rumour that China is back to buy some more,” said Terry Linn, analyst with Linn and Associates in Chicago.

Chinese state-owned importers bought at least five bulk cargoes of U.S. soybeans on Thursday, or at least 300,000 tonnes, for shipment mostly from the U.S. Gulf Coast, two traders with knowledge of the deals said.

Futures also drew support from short-covering at the end of the month and ahead of the May Day three-day weekend observed in much of the world.

CBOT corn, soy and wheat futures all declined during the month of April, reflecting reduced needs for grains and energy as the global coronavirus pandemic slowed economic activity. July corn fell 7.5 per cent, its fourth straight monthly slide, as demand for corn-based ethanol fuel collapsed.

July soybeans fell about four per cent in April, its second straight monthly decline and the biggest drop since January 2020. CBOT July wheat declined nearly seven per cent for the month, retreating after a seven per cent climb in March.

Weekly U.S. export data was supportive, with export sales of corn and wheat topping expectations.

The International Grains Council (IGC) trimmed its forecast for global wheat production in the 2020-21 season, driven partly by downward revisions for Russia, Ukraine and the European Union.

Traders were also monitoring dry conditions building in the southern U.S. Plains winter wheat belt. The weekly U.S. Drought Monitor rated 38 per cent of top winter wheat producer Kansas as “abnormally dry,” up from 23 per cent a week earlier.

— Christopher Walljasper reports on ag commodities for Reuters from Chicago; additional reporting by Julie Ingwersen in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.

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