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Soybeans jump 1% on Chinese purchases

U.S. soybeans rose 1% on Thursday as China’s recent purchases of North American supplies stoked hopes for stronger-than-expected demand from the world’s largest importer.

Corn edged higher, though a weak outlook for oil-substitute ethanol provided a ceiling to gains, while wheat fell 0.5%.

The most-active soybean futures on the Chicago Board of Trade were up 1.1% to $8.52 a bushel by 0406 GMT, having closed 0.2% higher in the previous session.

Analysts said soybeans were drawing support from recent Chinese purchases.

“Market chatter about more U.S. exports is helping,” said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

Chinese importers signed deals to buy at least three bulk shipments of U.S. soybeans this week after prices sank to an 11-month low as part of a broad-based commodities sell-off due to the coronavirus pandemic, according to government and private sources.

The deals come amid heightened concerns about global supply chain disruptions caused by the pandemic and as China works to fulfil trade deal commitments to dramatically accelerate purchases of U.S. farm goods.

The most-active corn futures rose 0.1% to $3.25 a bushel, having closed 2.4% firmer in the previous session.

Corn has drawn some recent support, though it remains under sustained pressure amid expectations of weak demand for ethanol following a historic plunge in oil prices.

Wheat futures shed 0.7% to $5.41-3/4 a bushel, having closed down 0.5% on Wednesday. Traders, however, continue to monitor global supplies.

Russia’s deputy agriculture minister Oksana Lut said last week the country will suspend exports until July 1 once its second-quarter export quota is exhausted, which is expected to happen in mid-May.

Ukraine, another major supplier, is ready to ban wheat exports if sales exceed limits agreed with traders, the deputy economy minister in charge of agriculture said last week.
Source: Reuters (Reporting by Colin Packham; Editing by Krishna Chandra Eluri)

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