Chicago | Reuters — Chicago Board of Trade soybeans rose to a six-week high on Tuesday on the potential for increased U.S. demand as world buyers worry about supply disruptions in Brazil because of a trucker strike and rains stalling harvest, traders said.
Additional support stemmed from a tight supply of soybeans at U.S. Gulf export terminals as icy U.S. Midwest rivers after a week of frigid temperatures slowed barges headed to U.S. Gulf export terminals.
But soybeans came off their highs late amid reports the Brazilian government was fining truckers for blocking the roads, a sign the strike may be ending, traders said.
Corn and wheat also sagged late — after early gains — following the volatile soybean trade.
Traders had been expecting China, the world’s top soy buyer, to begin shifting its business from the U.S. to South America where the harvest is under way. But Brazilian truckers protesting high fuel prices blocked main roads there, slowing the movement of grain to Paranagua, the country’s second-largest grain hub.
“The Chinese are watching this truck strike pretty closely as to whether it shifts any nearby float demand to the U.S. I don’t think it has — but if continues longer, it could,” one-cash-connected U.S. trader said.
Rain across northwestern Brazil, the largest soybean production state, was stalling harvests and also keeping the pipeline supply thin, traders said.
CBOT March soybeans closed 16-3/4 cents up, or 1.7 per cent, at $10.16 a bushel — after notching a six-week high of $10.29 (all figures US$).
“So far, Brazilian harvest selling has been guarded,” said Rich Feltes, vice-president of commodity research for brokerage R.J. O’Brien. “It will be interesting to see how much cash moves in response to the bean market breaking out to a new high.”
CBOT March corn ended down 1-1/4 cent, or 0.3 per cent, at $3.77-1/2 — the day’s low.
Chicago March wheat also came off its high late, closing steady at $5.05-3/4, while Kansas City March wheat gained on Chicago, up 4-1/2 cents, or 0.9 per cent, at $5.35-3/4 after Egypt’s GASC bought 290,000 tonnes of U.S. hard red winter wheat in its American-only tender using $100 million of U.S. government-backed credits.
“We would not have been in the ballpark” without the credit, said Shawn McCambridge, a Jefferies-Bache grains analyst, adding that the Egyptian wheat purchase “is supportive, but it doesn’t re-shape the balance sheet.”
— Christine Stebbins is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago, Colin Packham in Sydney and Sybille de La Hamaide in Paris.