Soybeans up for fourth day as wet weather slows U.S. harvest

21.09.2016

Chicago soybeans rose for a fourth straight session on Tuesday as harvest rain in the U.S. Midwest raised crop concerns and took attention away from forecasts for record production. U.S. corn rose, underpinned by rain risks, while wheat also ticked upwards.

Wet weather in the Midwest crop belt has encouraged short-covering by investors, helping grain markets recover from losses in the wake of a Sept. 12 U.S. government report that confirmed an outlook for record U.S. corn and soybean crops along with record world wheat inventories. Chicago Board Of Trade most-active soybean contract rose 0.8 percent to $9.80 a bushel by 1030 GMT.

Earlier in the session it touched a one-week high at $9.83. Corn inched up 0.3 percent to $3.38-1/4 a bushel and wheat added 0.4 percent to $4.05-3/4 a bushel. The U.S. Department of Agriculture (USDA) said after the market close on Monday that 9 percent of U.S. corn was harvested as of Sunday, down from the five-year average of 12 percent for this time of year and 11 percent expected by the trade.

The agency said four percent of U.S. soybeans were harvested, down slightly from five percent on average. It left unchanged its estimates for the share of corn and soybeans in good or excellent condition. "The soybean crop condition is stable but there could be some damage as rains are continuing in the Midwest," said Kaname Gokon at brokerage Okato Shoji in Tokyo.

The soybean market also saw some spillover support from a rally in palm oil, which hit a five-month high in Malaysia as knock-on effects of the El Nino weather pattern continued to raise production concerns. However, broadly drier conditions expected in the Midwest this week were curbing corn prices as harvesting of the cereal is more advanced than in soybeans, which are seen as more vulnerable to heavier rain forecast from next week.

Large global supplies continued to weigh on grain and oilseed markets. Commerzbank analysts cut their price outlook for corn and wheat, citing the USDA's projection of record global stocks in 2016/17. The bank lowered its average-price forecasts for the fourth quarter by 20 cents to $3.50 per bushel for corn and by 30 cents to $4.50 for wheat. A hold-up in purchases by Egypt's government buyer, as the world's biggest importer remained in a standoff with suppliers over a strict ban on traces of ergot fungus, was also weighing on wheat markets. Egypt failed to attract a single offer at its state grain tender on Monday, forcing it to cancel its third consecutive wheat purchase tender.


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