SINGAPORE, Nov 19: U.S. Soybeans rose 1 percent on Monday, buoyed by expectations of renewed buying after prices slid to their lowest in five months in the previous session as the world’s top buyer China cancelled purchases.
Corn rose for a second straight session while wheat ticked higher, snapping a six-session losing streak as sentiment across global financial markets turned positive on hopes that U.S. Politicians would find common ground to prevent the economy from being weakened by the ‘fiscal cliff’: a combination of spending cuts and higher taxes.
The dollar index, which measures the strength of the greenback against a basket of currencies, slid 0.3 percent, helping to boost prices. A weak dollar supports commodity prices by making them attractive for overseas buyers holding other currencies.
Chicago Board of Trade’s January soybeans rose 1 percent to $13.97-1/2 a bushel by 0302 GMT, after hitting its lowest since June 22 on Friday.
December wheat added 0.2 percent to $8.39-1/2 a bushel while December corn gained 0.6 percent to $7.31-1/2 a bushel.
‘The $14 mark seems to be pretty magnetic as prices are converging towards that point,’ said Victor Thianpiriya, an agricultural strategist at ANZ in Singapore.
‘The supply is still pretty tight and U.S. Exports over the next few months have to hit a record high.’
Soybeans are back where they started five months ago when prices began rallying to an all-time high, fuelled by worries about the harvest as the worst U.S. Drought in half a century scorched the grain belt.
With prices down 22 percent from their peak, the next phase of the market could hinge on whether end-users see fair value at current price levels.
The U.S. Department of Agriculture’s weekly export sales data on Friday showed there was a slight improvement in demand for soybeans in the week ended Nov 8. The USDA reported net soybean sales at 585,200 tonnes, the highest in two weeks. China bought 371,500 tonnes.
Chinese buyers have cancelled at least 600,000 tonnes of U.S. Soybeans, which dragged prices lower on Friday. The China National Grain and Oils Information Center said the deals were scrapped as weak domestic demand and a recent drop in prices made those purchases unprofitable.
China has bought a total 16.4 million tonnes of U.S. soybeans so far in the 2012/13 marketing year that began September 1, of which 7.7 million tonnes have been shipped, leaving 8.6 million tonnes on the books.
There were also indications that U.S. Demand for soy was strong. The soybean crush in October was the highest in nearly three years due in part to strong global demand for soymeal in the wake of supplies running low in South America.
Wheat rose, boosted by expectations that exports will increase due to declining prices and shortfalls among other major exporters. The weekly USDA data showed export sales of 314,500 tonnes were at a two-week high and within analysts’ estimates for 250,000 tonnes to 450,000 tonnes.
The market is also waiting to see whether Egypt, the world’s largest importer of wheat, will issue purchase tenders.
U.S. Corn export sales were at a six-week high of 312,000 tonnes, within estimates for 200,000 tonnes to 400,000 tonnes.
Prices at 0302 GMT
Contract Last Change Pct chg MA 30 RSI
CBOT wheat 839.50 1.50 +0.18% 872.39 32
CBOT corn 731.50 4.50 +0.62% 766.29 49
CBOT soy 1397.50 14.25 +1.03% 1577.13 29
CBOT rice $14.87 $0.03 +0.17% $15.46 55
WTI crude $87.55 $0.63 +0.72% $88.90 58
Currencies
Euro/dlr $1.277 $0.048 +3.89%
USD/AUD 1.037 -0.019 -1.75%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential (agencies)
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