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China price surge leads to $12 CBOT soybeans

Agriculture.com Staff 02/10/2016 @ 2:45am

Bullish early calls this morning have unfolded into a higher CBOT trade for corn, soybeans and wheat, market-watchers say.

At mid-morning, March corn was $4.54, January soybeans were $12.17 and March wheat was $9.70, according to private sources. The nearby soybean contract started the day at $11.91.

Behind the CBOT soybean surge was news of increasing demand in China that spawned big gains in the Chinese market, according to Illinois Grain market analyst Vic Lespinasse.

"Commission house buy stops were hit on the way up in beans this morning, pushing the January contract over $12, the first time the spot bean month has been over $12 in decades," Lespinasse says. "The big rally in beans is pulling corn higher also, as these two markets continue the acreage race."

USDA announced sales of 110,000 metric tons of U.S. corn to South Korea, as well as another sale of 110,000 metric tons to an unknown destination. News of these sales was preceded, according to Lespinasse, by news of a 120,000-metric-ton soft red winter wheat sale to an unknown destination. While the corn deals are for 2007-2008 shipment, the wheat deal is for the 2008-2009 marketing year.

Yet, weekly export inspections, announced Wednesday by USDA, were on the lower end of trade estimates, Lespinasse adds. Wheat export inspections tallied 18.4 million bushels, while the corn number was "a bit better than expected," he says, at 46.9 million bushels. The bean number was lower than expected at 25.8 million bushels.

"[Trading] volume is only fair as many traders are out of the market this week," Lespinasse says. "Watch beans for overall market direction."

Bullish early calls this morning have unfolded into a higher CBOT trade for corn, soybeans and wheat, market-watchers say.

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