Chicago | Reuters — U.S. soybean futures rose on Thursday to their highest level since July 25 as an ongoing drought in key exporter Argentina underpinned prices.
Soymeal futures, which hit a 19-month high, headed higher for the eighth straight session as fears have mounted that Argentina will struggle to meet its export commitments for the animal feed. The most-active Chicago Board of Trade soymeal futures contract has risen 14.3 per cent during the streak.
“Spot beans keep churning higher a penny or two at a time,” Matt Zeller, director of market information at INTL FCStone, said in a note to clients. “Overall, beneficial precipitation (in Argentina) is seen as remaining very limited with warm temperatures stressing (the) crop as well.”
Corn futures ticked higher on signs of strong export demand, hitting a new six-month top.
Wheat also rose, led higher by K.C. hard red winter wheat futures on concerns that parched soils in the U.S. Plains will reduce the size of the harvest there.
CBOT March soybean futures closed up seven cents at $10.24-1/4 a bushel, just below their session high of $10.24-3/4 a bushel (all figures US$).
CBOT March soymeal was $3.80 higher at $373.70 a ton, peaking at $374.90 a ton, the highest for the most-active contract since July 15, 2016.
Argentina could harvest fewer than 50 million tonnes of soybeans in the 2017-2018 crop year, the lead analyst at the Rosario grains exchange said on Wednesday, as a prolonged drought looks set to continue harming yields.
The dryness in the heart of Argentina’s Pampas grains belt is likely to persist through the second half of February, climate experts said.
“This is unlikely to have been the last downward revision. Pessimistic observers are already warning of a crop volume in the low 40 million tonnes range,” Commerzbank said in a note.
CBOT March corn was 1/2 cent higher at $3.67-3/4 a bushel. The corn market peaked at $3.68-3/4 a bushel, its highest since Aug. 16.
The U.S. Agriculture Department on Thursday said weekly export sales of corn totaled 2.072 million tonnes, topping market forecasts that ranged from 1 million to 1.6 million tonnes.
“Good export sales continue to support the market, discouraging profit taking,” CHS Hedging’s Krysta Van Damme said in a note to clients.
Chicago March soft red winter wheat ended up 6 cents at $4.61-3/4 a bushel. K.C. hard red winter wheat was 8-1/4 cents higher at $4.78 a bushel.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago; additional reporting by Manolo Serapio Jr. in Manila and Sybille de La Hamaide in Paris.