SINGAPORE: Chicago soybean futures advanced further on Wednesday, climbing to their highest in more than one week on concerns over crop losses in drought-hit Argentina.
Wheat rose on support from worries about supplies from war-ravaged Ukraine.
The most-active soybean contract on the Chicago Board of Trade (CBOT) added 0.3% to $15.48-3/4 a bushel, as of 0310 GMT, after climbing to its highest since Feb. 13 at $15.49 a bushel on Tuesday.
Corn near 1-week high on Argentina supply woes, soybeans firm
Wheat rose 0.1% to $7.63-3/4 a bushel and corn gained quarter of a cent at $6.80-3/4 a bushel.
A severe drought is reducing yields in Argentina, a major soybean and corn producer, as well as the world’s biggest exporter of soy products, including soyoil and soymeal.
Precipitation in Argentina’s crop belt over the next 10 days will remain limited in coverage and intensity, which will allow extensive dryness and stress to continue on late crop growth.
“Traders indicate that another heat wave in South America could increase the drought intensity,” commodity research firm Hightower said in a report. “The Argentina soybean crop is near the peak reproductive stage now, so heat could stunt yield potential.”
The country’s corn exports should fall about 40% year-on-year between March and June, the Rosario Grains exchange said on Friday.
However, farmers in Brazil are harvesting what is expected to be the largest soybean crop on record. Brazilian growers harvested 25% of the soybean area planted for 2022/23 through last Thursday, agribusiness consultancy AgRural said on Monday, although rains have slowed progress in some areas.
Traders have been assessing the prospects of a continued wartime Black Sea shipping corridor from Ukraine amid an escalation in fighting in eastern Ukraine. Russian President Vladimir Putin on Tuesday delivered a nuclear warning to the West over Ukraine, a day after his U.S. counterpart Joe Biden visited Kyiv.
A winter storm this week should bring an insulating blanket of snow to the northern Plains and Midwest, but the precipitation is expected to miss drought-hit areas of the southwestern Plains winter wheat belt.
The market awaits the U.S. Department of Agriculture’s annual two-day Outlook Forum starting on Thursday, in which the it is expected to release preliminary forecasts for 2023 plantings and production of major U.S. crops.
India will provide an additional 2 million tonnes of wheat to bulk consumers such as flour millers, as part of efforts to lower prices, which jumped to a record high last month, the government said on Tuesday.
Commodity funds were net buyers of CBOT soybean, soyoil, soymeal and corn futures contracts on Tuesday, and net sellers of wheat futures, traders said.
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