U.S. grains: Soyoil tops two-month high on export sales

(Scott Bauer photo courtesy ARS/USDA)

Chicago | Reuters — U.S. grain and oilseed futures advanced on Wednesday, with export sales driving soybean oil prices to their highest in more than two months.

Exporters struck deals to sell 40,000 tonnes of U.S. soybean oil, including 20,000 to China and 20,000 to unknown destinations, the U.S. Department of Agriculture said.

The deals fuelled ideas among traders that Chinese demand is strengthening, coming on the heels of other recent export sales of U.S. soybeans shipped from the Pacific Northwest. USDA said Monday exporters had sold 238,000 tonnes of U.S. soybeans to China and on Tuesday reported sales of 132,000 tonnes to China, the top importer of the oilseed.

“Soybeans continue to take their support from elevated demand, with PNW offerings being the cheapest in the world market right now,” said Karl Setzer, risk management team leader for MaxYield Cooperative in Iowa.

Chicago Board of Trade December soybean oil ended up 1.8 per cent at 29.18 cents/lb. after trading to 29.45, the highest for a front-month contract since Aug. 12 (all figures US$).

November soybeans rose one per cent to $9.05-1/4 a bushel.

USDA, in a monthly crop report due Nov. 10, may increase its estimates for China’s soybean imports due to improved demand, said Rich Feltes, head of market insight for broker RJ O’Brien.

However, the U.S. continues to faces stiff competition for exports from South America.

In the first half of next year, Brazil is expected to harvest a record 100.6 million tonnes of soybeans, up 4.6 per cent on the year, local analyst Agroconsult said.

China is “taking a bunch of South American beans this year,” said Jim Gerlach, president of brokerage A/C Trading in Indiana. “We’re still getting the short end of the stick.”

For U.S. wheat, demand on the global market has been sluggish due to cheaper supplies available from the Black Sea region and Europe.

Parched conditions in major exporters Russia and Ukraine have lent some support to wheat futures, which have been labouring with the prospect of record global supply in 2015-16.

However, rains should bring some relief to crops in the region, traders said.

December wheat rose 0.7 per cent to $4.94-3/4 a bushel as the market recovered from Tuesday’s one-month low of $4.83-1/4 a bushel.

December corn increased one per cent to $3.80-3/4 a bushel after slumping to a five-week low of $3.72 on Tuesday.

Tom Polansek reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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