SINGAPORE: Chicago soybeans gained more ground on Tuesday, rising almost 1% as the market was supported by short-covering and expectations of lower output in Brazil, although ample world supplies kept a lid on prices.
Corn rose to its highest in almost two weeks, while wheat gained for a second straight session.
“There is some support and buying at these levels,” one Singapore-based grains trader said.
“US has a lot of sell and there is stiff competition from South America for soybeans and corn, so we don’t see a big upside in prices.”
The most-active soybean contract on the Chicago Board of Trade (CBOT) added 0.92% to $11.55-3/4 a bushel, as of 0352 GMT. Corn rose 0.1% to $4.22 a bushel and wheat gained 0.4% at $5.77-1/4 a bushel.
Corn touched its highest since Feb. 15 at $4.24 a bushel earlier on Tuesday.
Agricultural markets, including soybeans, corn and wheat, are being underpinned by bargain-buying and covering of shorts, after suffering losses since the beginning of the year amid plentiful supplies.
Commodity funds were net buyers of CBOT corn, wheat, soybean, soymeal and soyoil futures contracts on Monday, traders said.
Big supplies push corn, soy to new 3-year lows
Brazil’s 2023/24 soybean crop is expected to reach 147.7 million metric tons, agribusiness consultancy AgRural said on Monday, lowering a January forecast of 150.1 million tons after yield losses in key producing areas due to adverse weather.
Farmers in the world’s largest soybean producer and exporter have been grappling with dry and hot weather this season, which has led government agencies and private consultancies to trim their output forecasts.
Still, ample supplies are likely to weigh on prices. In the United States, farmers must grapple with large corn inventories from last year’s harvest and with limited demand for feed from livestock producers, who reduced the nation’s cattle herd to its smallest level in seven decades.
The country also faces stiff competition for global grain and soy export sales. Russian wheat export prices continued to fall last week, hitting their lowest since late 2020, but analysts still believe they need to be lower to be competitive.
The price of 12.5% protein Russian wheat scheduled for free-on-board (FOB) delivery between late March and early April was $215 a metric ton, down $4 from the previous week, the IKAR agriculture consultancy reported.