January 24, 2013
Soyabean futures rose 1.6 percent on Tuesday, and touched a one-month high, as traders cited news China bought optional-origin soyabeans, talk that it may be looking for more, and concern about Brazil’s ability to move its expected record-large soyabean crop to port. Corn futures posted modest gains, but wheat tumbled 1.5 percent as investors took profits after the grain had climbed to a one-month top near $8 a bushel.
At the Chicago Board of Trade, CBOT March soyabeans settled up 22-1/2 cents at $14.51-3/4 per bushel after reaching $14.60-3/4, the contract’s highest since December 19. March wheat ended down 12 cents at $7.79-1/4 per bushel, retreating after hitting a one-month high at $7.99-3/4. March corn settled up 1 cent at $7.28-1/2 a bushel.
Soyabeans advanced after the US Department of Agriculture said private exporters reported sales of 120,000 tonnes of optional origin soyabeans to China for delivery in 2013/14. Analysts said the profit margins for crushing soyabeans in China have improved, encouraging processors to book additional cargoes. “There is talk that China is back in, shopping for February and March,” said Roy Huckabay at the Linn Group, a Chicago brokerage, adding that cash basis values for soyabeans had firmed in some US locations.
Support also stemmed from rumours that Brazil has over-booked soyabean sales and worries about infrastructure limitations in that country, which is projected as the world’s top soyabean producer and supplier for the 2012/13 marketing year.
Analysts have questioned whether Brazil will be able to move its expected record-large soya crop to port in a timely manner. Adding to the concern, rains forecast in northern Brazil over the next two weeks are likely to slow the harvest. “You have these rain delays and the combines are sitting there. It has given the market an indication that the next month and a half will be volatile. We’re going to have ups and downs, and thoughts that maybe some demand is shifting back to the US because of some of those delays,” said Ken Smithmier, analyst with the Hightower Report in Chicago.
CBOT wheat fell on profit-taking after the bellwether March contract rose in five of the previous six sessions but failed to breach psychological resistance at $8, peaking Tuesday at $7.99-3/4. Part of the profit-taking involved traders unwinding inter-market spreads, including long wheat/short corn positions, a factor that underpinned corn. The premium for front-month CBOT wheat over front-month corn rose to 63-3/4 cents per bushel on Friday, but tumbled back to 50-3/4 cents at the close on Tuesday.