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U.S. grains: Soybeans hit five-month high on oilseed supply worries

Chicago | Reuters — U.S. soybean futures rallied nearly one per cent to a five-month peak on Friday on concern about yield-cutting weather in South America and firm global oilseed markets.

Corn futures fell for the first time in six sessions in a profit-taking setback ahead of the weekend and as weekly export sales data came in well below trade expectations. Profit taking also pressured wheat, which hit a two-month peak a day earlier.

Soybeans shrugged off pressure from the lightest week of export sales this season and closed near session highs.

“The momentum for the soy complex to move higher is from unfavourable weather in Brazil and Argentina and concerns over other oilseed crops,” said Terry Reilly, senior commodities analyst with Futures International.

Oilseed supplies in Europe are tight and the sunflower seed harvest in Argentina is off to a slow start, he said. Meanwhile, dry weather in Malaysia has trimmed palm oil yields in the world’s No. 2 producer, sending futures to their strongest weekly gains in four months.

Concerns about global oilseed supplies also triggered some corn-soybean spreading on Friday, Reilly said.

Argentina’s agriculture ministry trimmed its soybean crop forecast on Thursday due to drought and warned on Friday that recent heavy rains created poor growing conditions in some areas. Several analysts have also trimmed their Brazilian soy crop estimates due to drought.

Chicago Board of Trade March soybeans ended 12-1/2 cents higher at $13.70-3/4 a bushel, gaining 0.9 per cent on the day and 2.5 per cent for the week (all figures US$).

CBOT March corn fell 2-3/4 cents, or 0.5 per cent, to $4.53 per bushel after earlier matching the prior session’s five-month high of $4.56-1/2. But posted its fifth straight weekly gain, adding 1.7 per cent.

“End-of-week profit taking and technical selling kept pressure on corn,” said Mike Zuzolo, president of Global Commodity Analytics.

“And export sales being 50 per cent below the four-week average was not a good number for the corn.”

The U.S. Department of Agriculture reported net corn exports last week just under 700,000 tonnes, the first time in a month that sales were below one million tonnes.

Investors unwound long corn/short soybean spreads after USDA released U.S. planting forecasts at its annual outlook forum, reducing corn seedings from a baseline forecast last week and raising soybean seedings.

USDA also forecast a near-record-large corn crop this summer and a bumper soybean crop.

CBOT March wheat dropped 6-1/2 cents, or 1.1 per cent, to $6.09-3/4 a bushel but added 1.9 percent in the week, the market’s third straight weekly advance.

Commodity funds bought an estimated net 9,000 soybean contracts on the day and sold a net 8,000 corn and 4,000 wheat contracts, trade sources said.

— Karl Plume reports on commodity markets for Reuters from Chicago.

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