Tuesday September 30, 2014




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Chicago soybeans near three-week high on weather concerns

Wheat mostly firm on short-covering ahead of USDA report

U.S. new-crop soybean futures rose to a nearly three-week high on Wednesday on worries about planting delays and potentially stressful crop weather, traders said.

Corn futures ended mixed with new-crop December edging lower, while wheat was mostly higher.

At the Chicago Board of Trade, new-crop November soybeans ended up 8-1/2 cents at $12.84-3/4 per bushel (all figures US$). The contract broke through its 200-day moving average at $12.84 and peaked at $12.95, its highest level since June 20, before paring gains.

November soy has risen 4.6 percent this week, after settling Friday at $12.28-1/4.

September corn ended up two cents at $5.53-3/4 a bushel while benchmark December fell 1/4 cent at $5.21-1/2. September wheat rose 1-1/2 cents to $6.79.

New-crop soybeans led the way up on concern about prospects for the U.S. harvest. Weather this summer has been mostly favourable for the soybean crop, and the U.S. Department of Agriculture has rated about two-thirds of the crop as good to excellent.

But the crop is developing more slowly than normal after a cool, wet spring. And some acres have yet to be planted -- especially in the eastern Midwest, where farmers typically plant "double-crop" soybeans immediately after harvesting winter wheat, in the same fields.

Rains have slowed the region's soft red wheat harvest, in turn stalling soybeans. The USDA last month projected U.S. soybean plantings at 77.7 million acres and indicated that 10 per cent would be planted after another crop.

"It's getting so late in the year... to double-crop that soybean acreage estimates are going to be trimmed," said Ken Smithmier, an analyst with the Hightower Group in Chicago.

"The crop is behind in a lot of areas, and we still have a threat of an early frost. It's tough to be negative toward that market, when you mix that in with the old-crop support that we've had," he said.

The market is closely watching demand in China, the world's largest soybean buyer, which imported 6.93 million tonnes of soybeans in June, up 35.9 per cent from May.

"Soybean prices have also been finding support from June's Chinese soybean import figures," Commerzbank said. "Import activity had long been hampered by delayed deliveries from Brazil. These problems have now been resolved."

Supplies of old-crop soybeans remaining from the last U.S. harvest are extremely tight, a factor that sent the front July futures contract soaring to a contract high on Tuesday at $16.30 a bushel. The thinly traded contract is in delivery and expires on Friday.

However, the July plunged 21-1/2 cents on Wednesday to settle at $15.91-3/4, a possible sign that cash markets are starting to loosen ahead of the autumn harvest. The cash soybean basis fell by 20 cents at a soy processing plant at Council Bluffs, Iowa.

New-crop corn loses ground to soybeans

Old-crop U.S. corn supplies are also scarce, a factor that lifted nearby July and September corn futures. But new-crop December, the most active contract, fell on profit-taking after rising four per cent on Tuesday.

December corn also lost ground to soybeans on inter-market spreads tied to weather worries, with forecasters predicting hot and dry conditions later this month in the western Midwest.

"There is a feeling that if it does dry out, it is going to hurt beans more than corn. So you've got people buying beans and selling corn," said Roy Huckabay with the Linn Group, a Chicago brokerage.

As well, traders were adjusting positions ahead of USDA's July 11 monthly supply/demand report, which is expected to show smaller projected stockpiles of U.S. corn for both 2012-13 and 2013-14.

CBOT September wheat rose for a third straight session on short-covering ahead of USDA's report and following recent sales of U.S. wheat to China.

-- Julie Ingwersen is a Reuters correspondent covering ag commodity futures markets in Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.


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