U.S. grains: Soybeans top $10 a bushel on Chinese demand, smaller crop

Chicago corn, wheat also up

CBOT November 2020 soybeans with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. soybean futures advanced on Monday, with the most-active contract rising above US$10 a bushel for the first time in two years on strong export demand from China, before paring gains on profit-taking, analysts said.

Corn futures ended modestly higher after reaching a six-month top and wheat also rose.

Chicago Board of Trade November soybeans settled up 3-1/2 cents at $9.99-1/2 per bushel after reaching $10.08-3/4, a contract high and the loftiest price for a most-active contract on a continuous chart since June 2018 (all figures US$).

CBOT December corn ended up one cent at $3.69-1/2 a bushel after hitting $3.71, its highest level since March 16, while December wheat finished up 3-3/4 cents at $5.45-3/4 a bushel.

Soybeans advanced after the U.S. Department of Agriculture (USDA) on Friday lowered its forecasts of U.S. soybean production and 2020-21 ending stocks.

Analysts noted the government left its estimate of U.S. 2020-21 soybean exports unchanged in its report despite an uptick in soybean sales to China, a factor that fed expectations USDA might further trim its stocks forecasts in coming months. USDA on Monday confirmed fresh sales of U.S. soybeans and corn to China.

“The trade wants to believe we are going to see continued demand, with a slight shrinking of crop size,” said Tom Fritz, a partner with EFG Group in Chicago, referring to the strength in soybean futures.

Gains were capped by profit-taking as the CBOT November contract recorded its 14th higher close in the last 15 trading sessions.

“The market is technically overbought,” Fritz said.

Corn futures drew support from USDA tightening its U.S. production and stocks forecasts, along with fresh sales to China. But corn inventories are still ample, a factor that has anchored prices.

After the close, USDA in a weekly progress report said the U.S. corn harvest was five per cent complete by Sunday. Condition ratings for the U.S. corn and soybean crops declined, while analysts on average had expected no change.

CBOT wheat futures firmed on bargain-buying following a one per cent drop on Friday. Additional support stemmed from news that Statistics Canada’s “model-based” estimates pegged Canada’s 2020 all-wheat harvest at 34.1 million tonnes, down from the agency’s Aug. 31 estimate of 35.7 million tonnes.

— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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