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Soybeans, Grains Higher in Early Trading Friday
Soybeans were higher in early trading Friday amid ongoing concerns about dry weather in Brazil and optimism about sales to China.
Rains in Brazil favored parts of northwest Mato Grosso, central and southeast Sao Paulo and southeastern Rio Grande do Sul in the past 24 hours, but heat and drought stress that’s impacting about 15% of the country’s growing regions will expand and could begin to affect a third of producing areas by midmonth, Commodity Weather Group said in a report this morning.
In the U.S., the ongoing partial government shutdown has left traders little to watch as export sales data has been on hold for the past two weeks. Still, researcher AgResource said it believes China has purchased 1.5 million metric tons of soybeans, and Bloomberg reported that state buyers in the Asian nation are seeking supplies from the U.S.
Combined with gains in stock indexes after a very bullish nonfarm payroll report, the optimism is giving crop prices a boost this morning.
Soybean futures rose 4½¢ to $9.17¼ a bushel on the Chicago Board of Trade. Soymeal added $1.60 to $318.30 a short ton, and soy oil futures gained 0.12¢ to 28.54¢ a pound.
Corn futures for March delivery added 3¼¢ to $3.82¾ a bushel.
Wheat gained 3¼¢ to $5.17 a bushel and Kansas City futures rose 4¢ to $5.07½ a bushel.
Wednesday’s Market Recap
Soybeans closed higher Thursday on continued worries about dry weather in Brazil and reports that China is back in the market for U.S. supplies.
Showers were limited in the center-west and center-south of Brazil in the past 24 hours with temperatures in the mid- to upper-90s in southwestern Brazil, according to Commodity Weather Group. Dry weather will return to more than a third of the South American country’s corn and soybean area and much of its cofffee and sugar regions after the middle of January.
Temperatures in the 90s also will start to become more frequent and widepread in northern and central Brazil, which will draw down soil moisture starting next week, the forecaster said.
Traders have been in limbo from a fundamental standpoint as the partial government shutdown, now in its 13th day, has kept the U.S. Department of Agriculture from releasing daily and weekly export sales reports. Inspections of soybeans were higher week-to-week in the seven days through Dec. 27, while corn and wheat assessments declined, the USDA said in a report earlier this week.
China may be back in the market for U.S. soybeans after taking a holiday break, Bloomberg reported on Thursday, citing four traders familiar with the trade process.
China’s top food buyer, Cofco Corp., was asking for prices for delivery in February and March, though the company didn’t make any purchases, according to the news company. AgResource, however, reportedly said state-run buyers probably purchased about 1.5 million metric tons.
Soybean futures rose 3½¢ to $9.10½ a bushel on the Chicago Board of Trade. Soymeal added $1.40 to $316.30 a short ton, and soy oil futures gained 0.20¢ to 28.38¢ a pound.
Corn futures for March delivery added 4½¢ to $3.80¼ a bushel.
Wheat gained 7¼¢ to $5.14 a bushel and Kansas City futures jumped 11¢ to $5.03½ a bushel.
Wednesday’s Market Recap
Soybeans and grains started 2019 higher on concerns about dry weather in Brazil and on a lack of news about exports from the U.S.
Dry weather is expected for at least the first 10 days of the year in major Brazilian growing states including Mato Grosso, Rio Grande Do Sul, and Parana, which could threaten production in the country.
The U.S. Department of Agriculture has pegged output in the South American country at 122 million metric tons, up from 120.3 million tons last year. Decent weather through November gave crops a boost, but dryness since may become a problem.
The partial government shutdown, meanwhile, is now entering its 12th day. Certain government reports have been canceled during the shutdown, which has left producers, analysts, and traders all guessing who’s buying soybeans and grains. That’s causing angst in Chicago as investors are lacking important fundamental data they normally rely on to make trading decisions.
Soybean futures jumped 11¾¢ to $9.05¾ a bushel on the Chicago Board of Trade. Soymeal gained $1.70 to $311.60 a short ton, and soy oil added 0.21¢ to 28.06¢ a pound.
Corn was up ¾¢ to $3.75¾ a bushel.
Wheat for March delivery added 5¢ to $5.08¼ a bushel while Kansas City futures gained 5¼¢ to $4.94 a bushel.