Winnipeg | Reuters — U.S. soybeans rebounded on Tuesday off a more than six-year low, helped by China’s decision to cut interest rates, although fears of a cooling economy in the world’s largest buyer of the oilseed kept gains in check.
Bargain buying and a bounce in other commodities, such as crude oil, nudged soybeans up modestly, after fears about China’s faltering economy weighed down markets during the previous session, said Bill Biedermann, a trader at Allendale Inc.
“We did see end-use buyers come in, so we know there is good real demand at those price levels,” he said.
Chicago wheat gave up earlier gains, pressured by the stronger U.S. dollar and ample world supplies, dragging down corn.
The size of the U.S. corn and soybean crops has been established and weather looks favorable, so there is little fundamental reason for any price rally, Biedermann said.
Chicago Board of Trade November soybeans rose 3-3/4 cents, or 0.3 per cent, to $8.77-3/4 a bushel, having closed down 1.7 per cent in the previous session when prices hit a contract low (all figures US$).
December corn slipped 3-1/2 cents to $3.77, after notching a near two-week high.
Chicago September wheat shed 8-1/4 cents, or 1.3 per cent, at $4.95 per bushel. The U.S. Department of Agriculture on Monday pegged spring wheat harvest progress at 75 per cent complete, seven percentage points higher than analyst forecasts.
China cut interest rates and banks’ reserve requirements for the second time in two months after a plunging stock market sent shockwaves around the globe.
“Ultimately we are seeing a reaction to the losses overnight,” said Andrew Woodhouse, grains analyst at Advance Trading Australasia.
Analysts also noted some support from a supply disruption in South America.
Argentine farmers started a five-day crop sales strike on Monday, part of an election-year push in the world’s No. 3 soybean exporter to change policies.
USDA said private exporters sold 210,000 tonnes of U.S. soybeans to unknown destinations for 2015-16 delivery.
USDA pegged 63 per cent of the soybean crop at good to excellent condition, matching analyst expectations.
USDA said 69 per cent of the corn crop is good to excellent, in line with market forecasts.
— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg. Additional reporting for Reuters by Julie Ingwersen in Chicago, Sybille de La Hamaide in Paris and Colin Packham in Sydney.