Chicago | Reuters — U.S. soybean futures rallied on Wednesday, rising 2.3 per cent to halt a two-day fall with the market underpinned by concerns that forecast rain may be insufficient to avert further drought damage to crops in Argentina and southern Brazil.
“It is the size of the crop in South America that will ultimately drive soybean prices and that situation has not changed with southern production areas in South America still experiencing drought conditions,” Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa, said in a note to clients.
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Soybeans had been caught up in a broad commodities sell-off as corn and wheat dropped sharply on Tuesday, after Moscow’s announcement that some of its troops were returning to base after drills, and investors grew less fearful that Black Sea export flows would be disrupted by a Russian invasion of Ukraine.
Corn futures rose 1.4 per cent on Wednesday on concerns about crop production in Brazil and Argentina, while wheat steadied as traders waited for further news and weighed conflicting statements on the possible withdrawal of some Russian troops from around Ukraine.
Chicago Board of Trade March soybean futures settled up 36-1/4 cents at $15.87-1/2 a bushel (all figures US$).
Traders are scrutinizing weather charts, some of which point to increased chances of rain next week in southern Brazil and northern Argentina after hot, dry conditions this week. Crop shortfalls in South America raise demand for U.S. supplies.
Private exporters reported the sale of 132,000 tonnes of soybeans to China for delivery in the 2022/23 marketing year, the U.S. Agriculture Department said early on Wednesday.
USDA’s weekly export sales report on Thursday morning was expected to show soybean export sales between 1.55 million and 3.3 million tonnes.
CBOT March corn futures were up nine cents at $6.47 a bushel and CBOT March soft red winter wheat was up 3/4 cent at $7.80-1/2 a bushel.
— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.
