Tuesday, 28 August 2012 12:54
SYDNEY: US soybeans inched higher on Tuesday as concerns about tight supplies from the drought-striken Midwest lingered, while corn firmed amid concerns over potential damage from Tropical Storm Isaac.
Wheat also rose for the first time in five sessions on worries about global supplies.
Chicago Board Of Trade November soybeans rose 0.29 percent to $17.23-1/4 a bushel, having fallen 0.74 percent on Monday. Despite rains across the US Midwest last week, the US Department of Agriculture said quality worsened, with soybeans rated good-to-excellent falling 1 percentage point to 30 percent for the week ending August 26.
"Any dips in beans are seen as buying opportunities," said Abah Ofon, a commodities analyst at Standard Chartered, citing strong Chinese demand for new-crop soybeans.
New-crop wheat rose 0.28 percent to $8.83-3/4 a bushel after closing down 0.82 percent the previous session, while December corn rose 0.31 percent to $8.03-1/4 a bushel after falling 0.96 percent the previous session.
"Many still expect Russia to clamp down on wheat exports despite recent tenders, while Tropical Storm Isaac may be pushing corn prices higher," said a Sydney-based analyst with an international brokerage who declined to be named as he is not authorised to talk to the media.
ISAAC MAY HURT CORN, RAIN SET TO BOOST WINTER WHEAT
Isaac was barrelling across the Gulf of Mexico after skimming past south Florida. Based on its current track, it was due to slam into the Gulf Coast between Florida and Louisiana Tuesday night or early Wednesday, the seventh anniversary of Hurricane Katrina, which devastated New Orleans.
The storm has already disrupted shipping: grain companies Cargill Inc and Archer Daniels Midland Co shut down some export elevators in Louisiana as a precaution.
Barge traffic along the Mississippi River between Baton Rouge, Louisiana, and the US Gulf has also been suspended. The river is a major channel for the movement of grains produced in the Midwest farm belt to export terminals at the Gulf of Mexico for shipment around the world. With corn stalk development hindered by the worst drought across the Midwest in 56 years, the high winds could blow crops down, analysts warned.
"The tropical storm could further damage the US corn crops, it really depends on how far inland it hits," the grains analyst said.
Farmers have slowed harvests to allow crops to dry after recent rains. The latest US Department of Agriculture harvest progression report, released at the end of trading on Monday, showed the corn harvest was 6 percent complete as of August 26, up just 2 percentage points from a week earlier, and below analyst expectations for 10 percent.
The five-year average for late August is 2 percent complete. A year ago, farmers had harvested 2 percent of the corn crop.
But Isaac could boost winter wheat plantings, with the World Weather Inc forecasting the drought-parched Midwest farm belt could get up to 5 inches of rain.
Wheat prices had fallen for the past five sessions as concerns over production from the Black Sea eased. The pressure was further fueled on Monday when Egypt, the world's largest consumer of wheat, bought 180,000 tonnes of Russian and Romanian wheat for October 1-10 shipment on a free-on-board basis, the main government wheat buyer said on Saturday.
Copyright Reuters, 2012