Soybean prices rise from 1-year low, ample supply caps gains

SINGAPORE: Chicago soybeans rose on Wednesday on short-covering, pulling away from a one-year low hit in the previous session after the US government raised its estimates for global supplies.

Wheat rose for a fourth straight session, and corn recouped last session's losses, although forecasts of abundant supplies kept a lid on all grain markets.

The Chicago Board of Trade most-active soybean contract rose 0.8 percent to $9.46-3/4 a bushel by 0315 GMT, after hitting a one-year low at $9.29-3/4 a bushel on Tuesday.

Corn gained 0.1 percent $3.67 a bushel. Wheat was up 0.1 percent to $4.33-1/2 a bushel.

The soybean market is especially struggling under the pressure of a global supply glut.

The US Department of Agriculture raised its forecast of global soybean stocks at the end of the 2016-17 marketing year to 87.41 million tonnes, from 82.82 million in March and well above an average of trade estimates for 83.91 million tonnes.

The figure reflected rising crop estimates for South America's soy harvest. The agency pegged Brazil's crop at 111 million tonnes, up from the 108 million estimated last month.

Brazil's agricultural statistics agency Conab also raised its estimate of the soybean crop to 110.2 million tonnes, from 107.6 million in March.

Rajesh Singla, head of agriculture research at Societe Generale, said, however, that supply-side news has been factored into the market. "Investors are covering short positions as the downside from here looks limited. Going forward the focus will be on US weather."

Corn futures also faced pressure on Tuesday from rising estimates on South America's corn output, while the USDA left its forecast of US 2016-17 corn exports unchanged at 2.225 billion bushels.

The USDA raised its forecasts for US and global wheat inventories at the end of the 2016-17 marketing year, bumping up its forecast of domestic wheat ending stocks to 1.159 billion bushels, a near 30-year high.

A sunny week ahead in Argentina's Pampas grains belt should allow farmers to resume corn and soy harvesting that was interrupted over recent days by heavy rains, local meteorologists said on Tuesday.

Still, some 700,000 hectares of prime soybean and corn area have been lost to bad weather in the 2016/17 crop year, according to the Buenos Aires Grains Exchange. Harvesting combines got stuck in soggy ground over recent days while cargo trucks were delayed by flooded roads.

Commodity funds were net sellers of CBOT corn and soybean futures contracts on Tuesday and net buyers of wheat, traders said.