U.S. grains: Soybeans set fresh high on supply worries, technical buying

Chicago wheat, corn also close higher

CBOT March 2021 soybeans with Bollinger (20,2) bands. (Barchart)

Chicago | Reuters — U.S. soybean futures soared on Tuesday, climbing to fresh 6-1/2-year highs on a mix of fund-driven technical buying and worries about South American supplies, analysts said.

Corn followed soybeans higher but stayed below psychological resistance at the $5 per bushel mark (all figures US$). Wheat rose about two per cent, setting a six-year high.

Chicago Board of Trade March soybeans settled up 34 cents at $13.47 per bushel, paring gains after reaching $13.73-1/4, the highest price on a continuous chart of the most-active soybean contract since June 2014.

CBOT March corn ended up eight cents at $4.91-3/4 per bushel but stayed below Monday’s contract high of $4.97-3/4. CBOT March wheat settled up 12 cents at $6.54 a bushel after reaching $6.64-1/2, the highest benchmark wheat price since December 2014.

Soybeans set the bullish tone, with chart-based buying accelerating after the March contract pushed above Monday’s high of $13.49-1/2.

“Soybean prices rallied roughly a half-dollar this morning when buy orders found an absence of sell orders and the computers took things sharply higher,” StoneX chief commodities economist Arlan Suderman wrote in a client note.

“That added energy to the corn and wheat pits as well, although fundamental support for such a move was questionable,” Suderman said.

Traders have been focused for weeks on worrisome production prospects in Brazil and Argentina due to dry conditions in some areas. Argentina last week said it will suspend sales of corn for export until Feb. 28 as the government seeks to ensure ample domestic food supplies.

Brazil’s soybean harvest has started slowly in the top-producing state of Mato Grosso. Local farmers say harvesting is behind last year’s pace due to scarce rainfall earlier in the season.

Analysts are also looking ahead to the U.S. Department of Agriculture’s Jan. 12 supply/demand reports, which will offer updated estimates of U.S. and South American crop production and export forecasts.

“It sure looks like that (report) could be friendly to bullish,” said Brian Hoops, analyst at Midwest Market Solutions.

Wheat followed the firm trend, with some analysts noting a decline in monthly winter wheat condition ratings in several U.S. states.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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