PARIS/SINGAPORE: Chicago soybeans extended gains on Tuesday to reach a three-week peak as investors saw hope that China will ease measures to counter COVID-19 infections after rare protests in the country unsettled markets a day earlier.
Improved sentiment pushed the dollar lower, helping Chicago wheat to steady after hitting a three-month low on Monday.
Corn inched down, with traders noting an unwinding of spreads against wheat and expectations for a bumper Brazilian harvest next year.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.2% at $14.60-1/4 a bushel by 1247 GMT, after earlier touching its highest since Nov. 7.
CBOT wheat inched up 0.1% to $7.81-1/4 a bushel, holding above Monday’s low of $7.73-1/4. Corn was down 0.3% at $6.69-1/2 a bushel.
A senior Chinese health official said on Tuesday that public complaints about COVID-19 controls stem from overzealous implementation, fuelling investor expectations that Beijing may ease restrictions that have prompted unusual public protests.
Crude oil rose sharply while soybeans added to gains from Monday.
China dominates global soybean imports and Chicago futures were supported on Monday by the announcement of a US export sale to an unknown destination - often interpreted as a shipment to China.
Investors were reacting to “signs this morning from Chinese officialdom that a cautious easing will remain underway,” Saxo Bank said in a note.
“This has inspired a comeback in some commodities.”
Wheat has been pressured by investment funds’ short positions and cheaper supplies from Russia and elsewhere in the Black Sea region.
Purchases in recent days by importers including Egypt’s state buyer GASC and Turkey’s state grain board TMO have underlined competitive prices for Black Sea origins, despite disruption caused by Russia’s invasion of Ukraine.
The US Department of Agriculture’s (USDA) office in Brazil has forecast the country will produce a record 126 million tonnes of corn in 2022/23.
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