Grains-Soybeans climb to seven-month top on Argentina dryness
Date: Thursday, February 22, 2018
Source: Hellenic Shipping News
Chicago soybean futures rose to a seven-month high on Tuesday with the market climbing for five out of six sessions, buoyed by poor rains over the weekend in Argentina’s drought-hit oilseed growing areas.
Wheat rose around half a percent, recouping some of last session’s losse, while corn edged higher.
The most-active soybean contract on the Chicago Board Of Trade added 0.9 percent to $10.30-3/4 a bushel by 0207 GMT, near the session high of $10.33-1/2 a bushel – the highest since July 25.
Wheat gained 0.5 percent to $4.60 a bushel, having closed down 0.9 percent on Friday, and corn rose 0.1 percent to $3.68 a bushel.
The drought afflicting Argentina since November has shrivelled soybean yields to the point that analysts and farmers have slashed harvest estimates by about 10 million tonnes, with final crop forecasts consolidating under the 50 million tonne mark.
Weekend rains, which were expected to bring relief, were not sufficient for a recovery in yields.
“Argentina’s soybean regions partially received some rain over the weekend. The amounts though were both modest and, more importantly, unsurprising,” said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia.
“Weather forecasters expect modest rains this week. The total rainfall though cannot do any more than arrest the decline in yields.”
An all-time high crop in Brazil is expected to compensate for yield losses in Argentina.
Brazil’s 2017/18 soybean crop is expected to reach a record 115.6 million tonnes, 1.2 percent above the previous record last year of 114.2 million tonnes, consultancy Safras & Mercado said on Monday.
The consultancy expects Brazil to produce 89.46 million tonnes of corn this season, 17 percent less than last year, as planted area falls 11 percent and yields are projected to come down as well.
In the wheat market, Russian wheat prices rose sharply last week, supported by higher global prices and helped by strong demand for Black Sea wheat in Asia, analysts said on Monday.
Large speculators switched to a net long position in CBOT corn futures in the week to Feb. 13, regulatory data released on Friday showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and switched to a net long position in soybeans.
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