U.S. grains: Soybeans firm on fund-driven buying

Chicago | Reuters — U.S. soybean futures firmed modestly on Wednesday in largely technical trade along with fund-driven buying and strength in allied soymeal futures, analysts said.

Corn futures declined and wheat fell on technical selling.

Chicago Board of Trade (CBOT) November soybean futures settled up one cent at $8.85-3/4 per bushel but stayed below a two-month high set Monday at $8.92 (all figures US$).

CBOT December corn ended down one cent at $3.74-1/4 a bushel and December wheat fell six cents at $5.17-1/2 a bushel.

Soybeans edged higher as funds covered short positions and possibly added new longs, expecting a seasonal climb in prices.

“Beans are just catching a bid from macro-type buying, maybe some short-covering,” said Matt Connelly, analyst with the Hightower Report in Chicago.

“They (commodity funds) look at where beans (prices) have been the last five to 10 years — and seasonally, when they bottom out — and this is the time,” Connelly said.

U.S. farmers are harvesting what is likely a record-large soybean crop, and export sales to top global soy buyer China have been stalled by an ongoing trade dispute. But those factors may have been factored into the market already, Connelly said.

CBOT soymeal futures rose on robust demand for the feed ingredient. Ahead of the USDA’s weekly export sales report on Thursday, analysts expected the government to report U.S. soymeal sales in the latest week at 150,000 to 450,000 tonnes.

Corn futures drifted lower on technical selling and bearish weekly ethanol data. The U.S. Energy Information Administration said weekly U.S. output of corn-based ethanol fell to 1.01 million barrels per day, the lowest since April, while stocks of the biofuel rose to 24.13 million barrels.

CBOT wheat fell in low-volume trade on follow-through selling one day after the most-active December contract climbed to a two-week high, only to close lower.

U.S. wheat exports look set for a strong second half to the 2018-19 season when shipments from Russia are expected to slow, the chairman of USDA’s World Agricultural Outlook Board said Tuesday.

As with Western European wheat, however, a modest pace of shipments in the season so far has been curbing futures prices.

A stronger dollar added pressure, making U.S. grains more expensive to those holding other currencies.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.