Soybeans tick up after 3 days of losses, ample supplies cap gains
Chicago soybean futures edged higher on Thursday after suffering losses for the last three sessions, triggered by dismal prospects for U.S. exports and abundant world supplies.
Wheat firmed marginally after closing lower on Wednesday with higher production in top exporting countries keeping a lid on the market.
The most-active soybean contract on the Chicago Board of Trade was up 0.1 percent at $8.56-1/4 a bushel, as of 0401 GMT. Earlier in the session, the market touched $8.54-1/2 a bushel, matching Wednesday’s low which was the weakest since Nov. 1, 2018.
Wheat rose 0.1 percent to $4.38-3/4 a bushel, while corn dipped 0.2 percent to $3.55-1/4 a bushel.
Higher soybean output in Brazil and Argentina has boosted global supplies and reduced prospects for the United States to sell its old-crop stocks.
The spread of African swine fever in China’s hog herd has reduced demand for soymeal, a protein-rich animal feed, in the world’s biggest importer of soybeans.
Wheat production in the Black Sea region, Europe and North America is expected to rise for 2019/20 crop which will be harvested around the middle this year.
“This year’s wheat crop is looking very good,” said one Singapore-based trader. “Mills will be making hand-to-mouth purchases as there are abundant supplies.”
Favourable weather during spring grain sowing in Black Sea producers Russia and Ukraine is increasing the chances of another large grain harvest due to healthy levels of soil moisture, analysts and traders said.
Russia, a major global wheat exporter to North Africa and the Middle East, is so far on track to harvest a grain crop of 118-129 million tonnes, according to official and local analysts’ estimate, up from 113 million tonnes in 2018.
The Ukrainian agriculture ministry expects the country’s grain crop to remain flat at around 70 million tonnes.
Statistics Canada projected total Canadian wheat plantings for 2019 at 25.7 million acres, up 4 percent from a year ago and exceeding the average trade expectation.
Commodity funds held a record-large net short position in CBOT corn futures as of April 16, data from the U.S. Commodity Futures Trading Commission showed, and traders said funds have expanded that position in the days since.
Funds also held sizable net short positions in soybeans and wheat futures, betting on further market declines.
Commodity funds were net sellers of CBOT corn, soybean, soyoil, soymeal and wheat futures contracts on Wednesday, traders said.
Source: Reuters (Reporting by Naveen Thukral; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)