Soybeans rise but hefty South American supply keeps speculators bearish

CANBERRA: Chicago soybean futures extended gains on Monday after last week’s three-year lows but plentiful supply from South America and weak US exports limited gains, with speculators still betting on lower prices.

Chicago soyabean futures rebound

Corn and wheat futures also rose, but with markets well supplied, both contracts were near their lowest since 2020.

Fundamentals

• The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.6% at $11.58 a bushel by 0128 GMT after dropping to $11.29 on Thursday, its lowest since November 2020.

• CBOT corn rose 0.7% to $4.27-1/2 a bushel having slid to $4.04 on Feb. 22, also the lowest since November 2020.

• Wheat gained 0.6% to $5.61-1/4 a bushel but was near September’s three-year low of $5.40 after prices fell 3.2% on Friday.

• Plentiful supply of soybeans from Brazil, corn from the United States and wheat from Russia have prompted speculators to build up huge short positions in all three CBOT contracts.

• That has driven prices lower but leaves the markets vulnerable to bouts of short covering that accelerate upward price moves when they happen.

• Brokers StoneX on Friday raised their forecast for Brazilian soybean production – the harvest of which is underway – to 151.5 million metric tons but consultants AgResource dropped theirs to 143.92 million metric tons.

• Analysts have been mostly downgrading Brazilian estimates in recent weeks but the country is still flush with beans after a record crop last season and is out competing the United States in export markets.

• Argentina, meanwhile, expects a bumper crop, offsetting any loss in Brazilian yields, with the Buenos Aires grains exchange leaving its 52.5 million ton forecast unchanged last week.

• For corn, StoneX lowered its Brazilian crop forecast to 124.44 million tons and AgResource reduced theirs to 114.94 million tons.

• The Buenos Aires grains exchange left its estimate for the Argentina’s 2023/24 corn harvest unchanged at 56.5 million tons.

• Global corn stockpiles are set to reach five-year highs later in 2024, undergoing their largest annual expansion in seven years.

• Large speculators trimmed their net short positions in CBOT corn and wheat in the week to Feb. 27 but increased their net short in soybeans.

• The Biden administration delayed an announcement of its revised climate emissions model for ethanol, extending uncertainty over whether corn-based fuel will qualify for lucrative new subsidies.

• Grain ships originating from the Black Sea or bound for Iran are about the only ones still sailing through the Red Sea as Houthi militants continue to attack vessels in the area, analysts said on Friday.

• Ukraine exported a record 8 million tons of freight, including 5.2 million tonnes of agricultural products, via its Black Sea corridor in February, Deputy Prime Minister Oleksandr Kubrakov said.