U.S. grains: Soy extends rally as China keeps buying

Data awaited from USDA

CBOT November 2020 soybeans with Bollinger (20,2) bands. (Barchart)

Chicago | Reuters — U.S. soybean futures climbed on Wednesday to their highest in more than two years and recorded a 12th straight daily advance on continued export demand from China, coupled with worries about crop-killing frost in parts of the Midwest, analysts said.

Wheat futures ended narrowly mixed while corn futures drifted lower in rangebound trade.

Chicago Board of Trade November soybeans settled up 5-3/4 cents at $9.78-3/4 per bushel after reaching $9.81-3/4, the highest price for a most-active soy contract on a continuous chart since June 2018 (all figures US$).

CBOT December wheat ended down 1/2 cent at $5.43-3/4 a bushel and December corn settled down 1-1/2 cents at $3.60-1/4 a bushel.

Soybeans firmed after the U.S. Department of Agriculture confirmed soybean sales to China for a fourth straight business day, announcing sales of 238,000 tonnes to the Asian country and another 132,000 tonnes to unknown destinations.

Cash markets for soybeans firmed at the U.S. Gulf export terminal as business picked up at a time when analysts expect USDA to lower its estimate of U.S. 2020-21 soybean production in monthly reports due on Friday.

“Another day, another (soybean) export sale. We are waiting for Friday’s report to come out and give some indications of a drop in the yields and the tightening of the balance sheets,” said Brian Hoops, analyst with Midwest Market Solutions.

Also, freezing temperatures early Wednesday in North Dakota and northern Minnesota may have damaged crops. Minnesota is the third-largest U.S. soy producer, but most of its acres are in the southern portion of the state, while North Dakota is the No. 10 producer.

“We probably nixed some beans, in North Dakota, anyway,” said Jack Scoville, analyst with the Price Futures Group in Chicago.

CBOT December corn stayed inside of Tuesday’s trading range as brokers awaited Friday’s USDA reports. Analysts expect the government to lower its forecasts of U.S. 2020-21 corn production and ending stocks, but stockpiles should remain relatively plentiful.

Wheat futures consolidated, with the December contract turning lower in late moves to post a fifth straight decline. Strong competition for global export business hung over the wheat market.

“Canada, Australia and Russia are all going to have bigger crops than last year,” Hoops said.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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