GRAINS-Soybeans hit 3-mth high on improved demand, corn up for 3rd day

In Commodity News 15/03/2016

Chicago soybeans edged higher on Monday, hitting their highest in more than three months with a strengthening currency in top exporter Brazil and strong demand for U.S. supplies underpinning the market. Corn rose for a third day to its highest since Feb. 24, while wheat resumed its upward move after easing marginally in the last session.

The most-active soybean contract on the Chicago Board Of Trade (CBOT) rose as much as 0.1 percent to $8.96-3/4 a bushel, matching Friday’s top price which was the highest since Dec. 7.

Corn climbed to an intraday high of $3.66-3/4 a bushel and was later up 0.4 percent. Wheat gained 0.4 percent to $4.77-1/2 a bushel, after dropping 0.3 percent on Friday.

Strength in the Brazil real helped support the grain markets after the currency advanced to a six-month high against the dollar, making its commodity exports more expensive.

The stronger real is boosting U.S. farm exports because the United States competes with Brazil for corn and soybean business on the world market. “There is upside potential for soybeans this week,” said Kaname Gokon, a strategist at Okato Shoji Co in Tokyo.

“Demand for U.S. soybeans is strong as there is a currency factor at play with real strengthening.”

A delay is getting shipments from Brazil is providing further support to U.S. prices.

Brazilian soybean export premiums surged over the past week even as the lineup of vessels waiting to load soybeans at local ports swelled, raising demurrage costs as the harvest peaks.

The gains could prompt U.S. farmers to sell more of the soy and corn crops they put into storage following massive harvests last year, traders said.

Agricultural markets have slumped during the past three years due to increasing global supplies. Many farmers have been waiting for prices to rise before selling their inventories.

U.S. Department of Agriculture said Japan bought 170,800 tonnes of U.S. corn. A day earlier, the agency reported the largest weekly U.S. corn export sales since November. The wheat market is being supported by concerns over dry weather in U.S. Plains states, although gains have been capped by ample world supplies.

Large speculators increased their net short positions in CBOT corn futures in the week to March. 8, regulatory data released on Friday showed.

The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short positions in CBOT wheat and soybeans.

Prices at 0317 GMT

  Contract        Last    Change  Pct chg  Two-day chg MA 30   RSI 
  CBOT wheat     477.50     1.75  +0.37%    +0.10%     467.21   69
  CBOT corn      366.75     1.75  +0.48%    +1.10%     365.48   64
  CBOT soy       895.50    -0.25  -0.03%    +0.70%     878.43   77
  CBOT rice      $10.51    $0.18  +1.69%    +1.55%     $10.92   31
  WTI crude      $38.38   -$0.12  -0.31%    +1.43%     $32.64   71
  Currencies                                                
  Euro/dlr       $1.115   $0.000  +0.04%    -0.20%
  USD/AUD         0.758    0.001  +0.19%    +1.69%

Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential

Source: Reuters (Reporting by Naveen Thukral; Editing by Tom Hogue)