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U.S. grains: Soybeans climb, led by soyoil

Wheat, corn higher on short-covering, chart-based buying

(Scott Bauer photo courtesy ARS/USDA)

Chicago | Reuters — U.S. soybean futures rose on Friday, led by a surge in soyoil tied to firm domestic cash values and rising global vegetable oil prices, traders said.

Wheat and corn climbed about one per cent on fund-driven short-covering and renewed international demand for wheat.

At the Chicago Board of Trade, November soybeans settled up 6-1/4 cents at $9.62-1/2 per bushel, and December soyoil ended up one cent at 34.38 cents/lb. (all figures US$).

December wheat settled up five cents at $4.21 a bushel, and December corn rose 4-3/4 cents at $3.54-1/4 a bushel.

Soyoil got a boost from allied vegetable oil markets including Malaysian palm and European rapeseed oil, along with robust domestic cash soyoil values.

The most-active December soyoil contract rose modestly in early moves and then moved higher as trade resumed following the daily 45-minute pause in CBOT trade. The contract reached its highest level since Aug. 23 before paring gains.

“The offshore values got soybean oil off to a kick-start, which is driving beans higher,” said Terry Reilly, senior commodity analyst with Futures International.

Sluggish export demand for U.S. soymeal prompted oil/meal spreading, he added. Most soybeans are processed into soymeal, used for animal feed, and soyoil, used in foods and biodiesel fuel. Brokers often trade on the price difference between the two products.

The poor export shipments in meal make a case for spread traders to buy oil and sell meal, Reilly said.

Wheat futures rose for a second straight session, and the most-active contract posted a weekly gain of 6.6 per cent, its biggest since June 2015.

Analysts cited short-covering by commodity funds following a spate of wheat purchases and tenders this week from buyers including Syria, Egypt, Algeria and Saudi Arabia.

“Wheat is the primary culprit with all of those (deals). And the wheat market was ripe, with its record fund short,” said Rich Feltes, vice president for research with R.J. O’Brien.

Corn followed wheat higher, supported by fund short-covering and firm U.S. cash markets. Technical buying played a role as the December corn contract pushed through psychological resistance at $3.50 a bushel and reached $3.58-3/4, its highest level since mid-July.

Corn ended the week up 4.3 per cent, its biggest advance since May.

Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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