U.S. grains: Soybeans rise as harvest slows; corn, wheat fall

U.S. soybean futures rose on Wednesday after four straight sessions of declines, buoyed by strength in the cash market and by harvest slowdowns, traders said.

Corn and wheat futures weakened, setting new lows, on expectations that a huge corn harvest will lead to a glut of grain in the U.S., traders said. Corn has fallen for six sessions in a row, its longest losing streak since late July.

Traders noted some bargain buying in soybean futures, which sank this week to their lowest levels since February 2012 before rains knocked farmers out of the fields and brought harvest to a halt.

“Precipitation will be seen across the Midwest over the next two days and this will create some harvest delays,” Sterling Smith, futures specialist with Citi, said in a note to clients. “Beans continue to be difficult for processors to originate in some areas and this is mildly supportive to the board.”

A storm system brought 0.25 to 1.5 inches of rainfall across a broad swath of the Midwest on Tuesday and Wednesday, with snow in northern areas, World Weather Inc. said. The precipitation will force farmers to keep their combines parked in barns but dry weather is forecast from Thursday into early next week, which will provide a window for harvesting.

Chicago Board of Trade (CBOT) January soybean futures, the most actively traded contract, settled up 4-3/4 cents at $12.55 a bushel. CBOT November soybeans, which expire on Nov. 14, were 3-3/4 cents higher at $12.63 a bushel (all figures US$).

Strong export demand also supported soybean futures, along with uncertainty about production from countries in the southern hemisphere during the next few months.

“If you get a good Brazilian crop, then prices will most probably be bearish from here, but while this is not a certainty there is a risk to the upside, especially given the current strength of demand,” Macquarie analyst Chris Gadd said.

Traders were reluctant to stake out large positions ahead of the U.S. Department of Agriculture’s supply and demand report on Friday. The report, the first since September due to the partial shutdown of the U.S. federal government last month, was expected to forecast a record corn crop.

“We might see some near-term support for corn as we see some of the speculators cashing out of their short positions at these lower prices but the reality is we’ve just had an enormous corn harvest and lower prices are likely required to find demand,” Macquarie’s Gadd said.

CBOT December corn was down 3-3/4 cents at $4.21-1/4 a bushel, with the front-month contract hitting its lowest since Aug. 31, 2010 during the session. CBOT December wheat was off 2-3/4 cents at $6.53-1/4 a bushel. The front-month contract bottomed out at $6.52-1/4, the lowest since Sept. 24.

Egypt’s GASC bought 60,000 tonnes of wheat from Romania in a tender for shipment in December. The country, which is the world’s biggest importer of wheat, paid $300.23 per tonne in the deal.

— Mark Weinraub is a Reuters correspondent covering grain futures markets in Chicago. Additional reporting for Reuters by Sam Nelson in Chicago and Naveen Thukral in Singapore.

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