US soyabean futures rallied on Tuesday, with another round of export deals with China as well as concerns about dry weather in Argentina pushing prices higher, traders said. Short covering lent support to corn and wheat futures but gains in the grains were limited by ample supplies.
Soyabeans received additional support from a rally in the palm oil market and technical buying after the market briefly dipped during the overnight trading session. Malaysian palm oil futures hit their highest level in 4-1/2 years on Tuesday, reversing losses earlier in the day, after data indicated that output fell at the start of the month.
At 10:33 am CST (1633 GMT), Chicago Board of Trade January soyabean futures were up 14 cents at $10.57-1/2 a bushel. "There is really a bunch of small things fundamentally supporting soyabeans," said Karl Setzer, analyst at MaxYield Cooperative. "We continue to see that (export) demand. Argentine weather is giving us a bit of a bump as it has turned hot and dry down there."
The US Agriculture Department on Tuesday morning said that private exporters reported the sale of 198,000 tonnes of soyabeans to China for delivery during the 2016/17 marketing year and 378,000 tonnes of soyabeans to unknown destinations, split between 2016/17 and 2017/18. USDA also said that exporters sold 276,000 tonnes of corn to South Korea for 2016/17 shipment. The deal helped buoy the corn market after a choppy overnight session.
CBOT March corn was up 3-1/4 cents at $3.62-1/2 a bushel. CBOT March wheat was up 3-1/2 cents at $4.11-3/4 a bushel, on track for its third straight higher close. The wheat market has been searching for a foothold and traders said cold weather risks for US wheat plus the prospect of lower plantings for the next US harvest could help prices.
"A colder pattern next two-three weeks raises winterkill risks for Midwest/Plains wheat but snowfall may limit the threat," Commodity Weather Group said in a daily note. But expectations for bumper crops in other parts of the world continued to hamper the market.
Canada's wheat crop withstood unfavorable autumn weather, topping Statistics Canada's previous estimates and last year's production. Statscan on Tuesday pegged the all-wheat crop at 31.7 million tonnes, up 15 percent from last year and exceeding the average trade expectation of 30.7 million tonnes. That follows a record production outlook from Australia on Monday.
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