Soybeans edge higher, Argentina rain forecasts limit support

In Commodity News 05/02/2016

U.S. soybeans rose on Thursday, recouping about half of the 1 percent losses from the previous session, though forecasts for much-needed rains in Argentina capped gains. Corn also rose, recovering losses on Wednesday, and wheat edged higher.

Chicago Board of Trade front-month soybeans gained 0.4 percent to $8.80-1/4 a bushel, although analysts said prices remain under pressure from rain forecast across Argentina, one of the world’s largest soybean and corn exporters.

“Weather continues to drive the market, and coupled with some export delays in Brazil – there is still pressure on the market,” said Andrew Woodhouse, grains analyst, Advance Trading Australasia. The weather forecast buoyed market expectations for grain production in Argentina, with private analytics firm Informa Economics raising its estimates of 2015/16 corn and soybean production in Argentina.

It expected Argentine soybean production to total 60 million tonnes, up from 58.5 million last month. Meanwhile, soybean buying by top importer China is expected to slow next week as Chinese markets will be closed all week for Lunar New Year celebrations, traders said.

Market direction later in the session will likely be driven U.S. Department of Agriculture export data set for release on Thursday. Analysts expect net weekly corn sales of 800,000 to 1 million tonnes, soybeans at 400,000 to 600,000 and wheat at 200,000 to 400,000. Front-month corn rose 0.2 percent to $3.71-3/4 a bushel, having closed down 0.4 percent in the previous session. Research group Informa upped its estimate for Argentina’s upcoming 2015/16 corn harvest to 26 million tonnes, from 22 million previously.

Front-month wheat rose 0.1 percent $4.80-1/2 a bushel, having closed up 1 percent on Wednesday, but remains under pressure from ample global supplies.

Traders reacted cautiously to news that top importer Egypt would again allow traces of a grain fungus in a latest twist in a standoff with traders over import rules.

Grains prices at 0249 GMT

  Contract        Last    Change  Pct chg  Two-day chg MA 30   RSI 
CBOT wheat     480.50     0.50  +0.10%    +1.10%     473.08   58

  CBOT soy       880.25     3.50  +0.40%    -0.68%     873.61   49
CBOT corn      371.75     0.75  +0.20%    -0.20%     363.30   58
  CBOT rice      $11.15    $0.02  +0.13%    -0.22%     $11.32   55

  Euro/dlr       $1.108  -$0.002  -0.23%    +1.48%
WTI crude      $32.66    $0.38  +1.18%    +9.30%     $33.01   54
  Currencies                                                

  USD/AUD         0.718    0.001  +0.11%    +1.95%

Most active contracts

Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight

RSI 14, exponential

Source: Reuters (Reporting by Colin Packham; Editing by Richard Pullin)