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U.S. grains: Soybeans set six-month top

Excessive moisture in Argentina's soy may hit yields; corn, wheat follow firm trend

soy
(Scott Bauer photo courtesy ARS/USDA)

Chicago | Reuters — U.S. soybean futures rose about two per cent on Tuesday, touching a six-month high on worries about excessive rains in Argentina crimping production prospects, analysts said.

Corn and wheat followed the firm trend, drawing additional support from a setback in the dollar.

Chicago Board of Trade March soybeans settled up 23 cents at $10.69-1/4 per bushel after reaching $10.75-1/2, its highest since July 14 (all figures US$).

CBOT March corn ended up seven cents at $3.65-1/2 a bushel and March wheat rose 7-1/2 cents to $4.33-1/2 a bushel.

Soybeans led the way up following recent showers in Argentina’s crop belt.

“Soybeans are taking nearly all of their support from ongoing rains in Argentina and how they have likely reduced soybean production,” Karl Setzer, an analyst with the MaxYield Cooperative in West Bend, Iowa, wrote in a daily note.

“Analysts in Argentina believe soybean production loss could total 10 per cent, or roughly 147 million bushels. This is a worst case scenario though, with actual loss likely being less,” Setzer added.

The rally triggered a round of farmer selling, pressuring cash soybean and corn values at the U.S. Gulf Coast.

But neither the farmer sales nor a disappointing monthly crush report from the National Oilseed Processors Association had much effect on the soy rally.

NOPA said its members crushed 160.176 million bushels of soybeans in December, down from 160.752 million in November and below an average of trade expectations for 162.8 million.

Grains followed soybeans higher, with a weaker dollar and fund short-covering adding to bullish sentiment. A softer greenback tends to make U.S. grains more attractive to holders of other currencies.

Investors sold the dollar after U.S. president-elect Donald Trump said the currency was too strong.

CBOT March corn set a 2-1/2-month high at $3.66-1/2 and March wheat reached $4.37-1/2 before paring gains.

“Wheat short-covering provides strength for the food grain on the weaker dollar and strength in the other markets,” INTL FCStone chief commodities economist Arlan Suderman wrote in a note to clients.

— 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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