U.S. grains: Soybeans up again on export demand, supply concerns

Markets recover after setback on Thursday

CBOT January 2021 soybeans (candlesticks) with 20-day moving average (green line) and ICE January 2021 canola (yellow line). (Barchart)

Chicago | Reuters — U.S. grain futures rose on Friday as soybeans traded near a 4-1/2-year high reached earlier this week on strong export demand and tightening domestic inventories.

The soybean market appeared to be well supported at current prices, after the U.S. Department of Agriculture ignited a rally with a report on Tuesday that projected U.S. corn and soybean stockpiles at seven-year lows, said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage.

Prices could climb further if crop weather worsens in South America, he said. Dryness has already hampered plantings in Brazil, the world’s biggest soybean supplier.

Brazilian farmers have already pre-sold an unprecedented amount of their new soybean crop due to recent gains in U.S. futures prices.

“Should problems develop in South America or Chinese demand continue to be strong, sharply higher bean prices could easily be justified,” Pfitzenmaier said.

The most-active soybean contract on the Chicago Board of Trade (CBOT) settled 2-1/2 cents higher at $11.48 per bushel, after surging on Wednesday to its highest price since June 2016 at $11.62-1/4 (all figures US$).

CBOT corn ended up 2-1/4 cents at $4.10-1/2 per bushel, after rising this week to its highest price since July 2019.

Wheat closed 5-1/4 cents higher at $5.93-1/2 per bushel. The most-active contract hit its lowest price since Oct. 6 earlier in the session.

Traders on Monday will review a National Oilseed Processors Association (NOPA) report that is expected to show U.S. soybean crushings in October likely surged to the second highest monthly level on record.

USDA on Friday reported that weekly U.S. soybeans export sales in the week ended Nov. 5 were 1,468,400 tonnes, a marketing-year low that was in line with analysts’ expectations for 800,000 to 1.8 million tonnes.

Demand has been strong from China, the world’s top soybean importer. Chinese buyers purchased 745,611 tonnes from the United States last week, including about 202,800 tonnes switched from unknown destinations, USDA said.

— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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