Chicago soybean futures gain on higher oil prices

BEIJING: Chicago soybean futures rose on Wednesday, rebounding from a four-month low hit in the previous session, tracking higher crude oil prices.

The most-active soybean contract on the Chicago Board of Trade (CBOT) rose 0.3% to $11.16-3/4 a bushel by 0610 GMT, while wheat gained 0.8% to $5.89-3/4 a bushel. Corn dropped 0.3% to $4.20-3/4 a bushel.

Soybeans futures sometimes track crude oil prices, which climbed from a seven-week low, as higher energy prices lift demand for biofuel feedstocks.

A surprise drop in weekly U.S. crop condition ratingsalso offered support to soybean futures. The U.S. Department of Agriculture on Monday rated 65% of the soy crop as good to excellent, down from 66% last week, while analysts on average had expected an improvement.

But a lack of fresh Chinese purchases weighed on the oilseed market, analysts said.

“Optimism over U.S.-Mainland China trade prospects faded following the initial uplift from the two countries’ talks last month. There is no evidence China would purchase anything beyond a continuation of the current arrangement of 25.0mn tonnes of soybeans this year, a volume below historical norms,” said a Shanghai-based analyst.

China’s soybean imports fell 15.3% in May from a year earlier, but the volume was still the third highest on record for the month, exceeding analysts’ expectations as peak South American supplies and smoother port logistics supported arrivals.

Meanwhile, the USDA confirmed private sales of 120,000 metric tons of old-crop U.S. corn to undisclosed destinations.

Weather in the heart of the Midwest crop belt remained generally favourable, with warm temperatures and showers crossing the region this week.

Traders awaited direction from a monthly USDA supply and demand report to be released on Thursday.

USDA condition ratings for corn were unchanged, despite trade expectations for an improvement.

Conditions for winter wheat, which has been stressed by drought this year, declined to a new low, though an advancing harvest kept attention on incoming supply.