U.S. soybean futures rallied more than two per cent on Friday on firm cash markets, good export demand and spillover strength from higher soymeal futures, which surged more than four per cent.
Wheat futures edged higher for a second straight day, aiming for the first weekly gain in a month, amid concerns about crops in key exporting countries in the southern hemisphere.
Corn touched a one-week high on strong demand but later slipped on light profit-taking, with prices anchored by ample U.S. supplies following a record-large harvest.
The U.S. soybean harvest was also massive, estimated to be the third largest ever. The government’s export forecast, already the largest in three years, was likely to increase further after strong early season sales, largely to top-importer China.
The U.S. Department of Agriculture, in a monthly report on Nov. 8, forecast U.S. soybean exports in the 2013-14 marketing year at 1.45 billion bushels. Sales in the marketing year to date are already at 90 per cent of that forecast, versus only 74 per cent at the same point a year ago.
“The trade has realized that USDA will have to increase its export forecast in the next report. Realistically they might go up 25 million bushels in the December report and maybe a little further in the January report,” said Rich Nelson, chief strategist at Allendale Inc.
“We still have a good deal of export demand to fill for that January-through-March time frame.”
USDA confirmed on Friday private sales of 115,000 tonnes of U.S. soybeans to China. That followed a weekly USDA report on Thursday that showed soybean sales last week well above expectations at nearly 1.4 million tonnes.
Chicago Board of Trade January soybeans added 28 cents to $13.19-1/2 a bushel, a 2.2 per cent gain that was the strongest in two weeks (all figures US$). Soybeans notched a two-month high of $13.22 during the session and gained three per cent on the week, the second weekly gain in three weeks.
December soymeal futures soared $16.80, or 4.1 per cent, to $427.80 per ton.
CBOT December corn shed 3/4 cent on Friday to close at $4.22-1/4 a bushel but ended the week up 1/4 cent. Although small, the weekly rise was the first in five weeks.
Commodity funds bought an estimated net 10,000 soybean contracts on the day as well as a net 6,000 soymeal contracts and 3,000 corn contracts.
CBOT December wheat added 3/4 cents to $6.49-1/2 a bushel for a 0.8 per cent weekly gain.
Wheat remained supported by worries about a reduced crop and lower quality in No. 2 exporter Australia, where rains have hampered harvesting. Concern about a smaller-than-anticipated Argentine crop, which could bolster U.S. exports, also supported prices.
— Karl Plume reports on ag commodity markets for Reuters from Chicago.