Soybeans climb, rebound from fund-driven losses

Tuesday, 13 November

By Asad Naeem

Soybeans Climb

SYDNEY: US soybeans rose on Tuesday, edging higher on bargain hunting after a 4-1/2-month low touched in the previous session on technical selling triggered by a larger than expected US production forecast.
Corn rose slightly after sharp losses and wheat also firmed.

Chicago Board Of Trade January soybeans rose 0.66 percent to $14.14-1/4 a bushel, having closed down more than 3 percent after hitting a session low of $14.02 a bushel, a level not seen since the onset of the worst US drought in 56 years.

“Last night, funds came into the market and smashed it down,” Andrew Woodhouse, grains analyst at Advance Trading Australasia said.

“Today, there is a bit of buying activity because the market got sold-off too heavily.”

December corn rose 0.73 percent to $7.23-1/4 a bushel after falling 2.82 percent in the previous session, while December wheat rose 0.32 percent to $8.60-1/2 a bushel after falling 3.24 percent on Monday.

FUNDS SELL FOLLOWING USDA ESTIMATES

Soybeans fell on Monday as funds sold an estimated 8,000 soybean contracts, 18,000 corn and 6,000 wheat contracts, CBOT floor sources said.

Fund long liquidation was triggered when the US Department of Agriculture forecast US production at 2.971 billion bushels, up from its October estimate of 2.86 billion and the 2.892 billion predicted by analysts.

Favourable weather forecasts further buoyed expectations for South America to produce a bumper soybean crop.

Beneficial rains moved into the southern half of Brazil’s top soy-producing state of Mato Grosso, boosting prospects for soybean planting and germination, local forecaster Somar said.

However, rains continue to cause disruption to sowing in Argentina.

A cold front dumped about 50 millimeters of rain on Argentina’s already soggy grains belt over the weekend, bringing corn and soy planting to a halt and deepening output worries at a time of growing world food demand.

Traders continue to monitor US weather maps as winter wheat struggles following the drought.

Meteorologists said the drought-hit US hard red winter wheat crop in the Plains states was likely to suffer cold weather, with no sign of much needed rain in the short term as the wheat enters a winter dormancy stage of development.

Despite the unfavourable weather, the USDA raised its outlook for global wheat ending stocks to 174.18 million tonnes from its October estimate of 173 million tonnes. That surpassed the 170.969 million analysts had expected.

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