Chicago soybeans set for weekly gain on Chinese demand prospect

Chicago soybean futures rose more than 1% on Friday, with prices on track to end the week on a positive note, as expectations of strong Chinese demand underpinned the market.

Wheat was also higher and the market is set for its first weekly rise since early October on concerns over Black Sea supplies and excessive rains damaging the Australian crop.

The most-active soybean contract on the Chicago Board of Trade (CBOT) Wv1 was up 1.1% at $14.53-1/4 a bushel, as of 1304 GMT, and the market has gained 4% so far this week.

Wheat Wv1 climbed 1.6% on Friday to $8.53-3/4 a bushel, putting this week’s rise at 3% after four weekly losses while corn Cv1 was up 0.6% at $6.83-1/4, just above last Friday’s close.

The soybean market has been supported by expectations of strong demand from top importer China.

However, the U.S. Department of Agriculture (USDA) said U.S. soybean export sales in the week ended Oct. 27 totalled 830,200 tonnes, at the low end of a range of trade expectations.

Corn export sales at 372,200 tonnes were in line with expectations.

Traders were also digesting rising private crop estimates. Commodity brokerage StoneX late on Wednesday raised its estimate of the average U.S. corn yield to 174.5 bushels per acre (bpa), from 173.9 last month.

Uncertainty about grain exports from the war-torn Black Sea region and adverse weather conditions in Australia supported wheat.

“We are sticking with our belief that prices will not lastingly drop back to their pre-war levels in the short term. After all, this episode has illustrated that Russia views the deal as political leverage and could terminate it at any time in the event of any renewed escalation in the conflict with Ukraine,” Commerzbank said in a note.

Support came from flooding and excessive rains across key parts of Australia’s wheat-growing areas which resulted in extensive damage to what was expected to be a record bin-busting high quality crop just a few weeks ago, exacerbating concerns over world food supplies.

While Australia is still on track for a third year of bumper harvest, about half of the crop grown on its eastern grain belt – known for premium hard wheat – is likely to be reduced to animal feed, although the extent of the damage will be known after waters recede, traders, analysts and farmers said.

In France, the European Union’s largest grain producer, the warmest October in 40 years has accelerated crop development so much that it has left them fragile to sudden frosts later in the season, French crop institute Arvalis warned on Friday.
Source: Reuters (Reporting by Naveen Thukral; Editing by Sherry Jacob-Phillips and Alison Williams)