Soybeans at new 6-1/2 year high as market sees tightening supply
- South America weather risks, Chinese demand stay in focus.
- USDA report expected to trim US soy, corn supply estimates.
- Corn hovers around $5 threshold as Argentina eases export ban.
- Wheat steadies after 3-day fall.
PARIS/SINGAPORE: Chicago soybean futures rose on Monday to a fresh 6-1/2 year high as the market stayed focused on South American weather risks and strong Chinese demand ahead of US government forecasts expected to show tightening supplies.
Corn was little changed as it held near a 6-1/2 year high, with traders assessing Argentina's decision on Monday to ease a temporary corn export ban.
Chicago wheat turned higher to break a three-day drop that had taken it away from last week's six-year peak.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.6% at $13.83-1/2 a bushel by 1232 GMT.
Earlier in the session, the market reached $13.88-3/4, its highest since June 2014 and slightly above a previous 6-1/2 year top struck on Friday.
The latest gains in soybeans reflected "the combination of concerns about South American supply, new Chinese orders in the US, and the expectation that the USDA could also paint an even tighter picture of the situation on the US soybean market tomorrow," Commerzbank said in a note.
Grain markets are turning their attention to Tuesday's US Department of Agriculture (USDA) world crop report, in which analysts expect the agency to trim its forecasts of US soybean and corn stocks at the end of the 2020/21 marketing year.
A USDA announcement on Friday of private sales of 204,000 tonnes of US soybeans to China, the first such confirmed sale to China in two months, also suggested renewed Chinese demand.
In Tuesday's report, the USDA further expected to lower projections of global soybean and corn stocks, partly due to reduced harvest prospects in South America.
Argentina's corn crops urgently need rain to avoid yield declines, the Rosario grains exchange said on Friday.
CBOT corn added 0.5% to $4.98-3/4 a bushel.
Strong chart resistance at $5 and news of Argentina's switch from a full export halt to a 30,000 tonne daily cap encouraged prices to consolidate.
CBOT wheat was up 1.0% at $$6.45 a bushel.
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