Chicago | Reuters — U.S. soybean futures rose on Wednesday on commodity fund buying at the start of a new month along with fresh export demand, analysts said.
Wheat and corn futures followed the firm trend, with corn buoyed by bullish weekly ethanol data.
Chicago Board of Trade March soybean futures settled up 12-1/4 cents at $10.36-3/4 per bushel. The contract rallied after finding chart support at $10.17, a near three-week low.
March corn ended up 8-1/2 cents at $3.68-1/4 a bushel while March wheat rose 13 cents at $4.33-1/4 a bushel (all figures US$).
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Soybeans rallied on confirmation from the U.S. Department of Agriculture that private exporters sold 236,700 tonnes of U.S. soybeans to unknown destinations in the last day.
“The sale that we had for soybeans this morning, while it’s not a huge number, it does say there was some buying interest on the recent weakness,” said Ted Seifried, chief market strategist for Zaner Ag Hedge.
CBOT soybean futures had been in retreat for the last week as improving weather bolstered soy crop prospects in South America, after mid-January floods in Argentina lifted futures to a six-month high.
“The South American soybean supply picture is looking pretty good,” said Phin Ziebell, agribusiness economist at National Australia Bank.
Speculators also appeared to be investing in grains on the first day of February.
“Corn, soybeans, and wheat are all trading on the positive side to start the day session. This is coming from new-month buying and short covering in the market,” MaxYield Cooperative analyst Karl Setzer wrote in a note to clients.
Corn got a boost when the U.S. Energy Information Administration reported production of corn-based ethanol in the latest week rose to a record-high 1.06 million barrels per day, surpassing a peak struck earlier in January.
However, ethanol futures fell after the EIA data showed that stocks of the corn-based biofuel rose to 21.87 million barrels, the most since May.
Corn bulls noted that the European Commission sharply cut its outlook for 2016-17 maize ending stocks in the European Union to take account of higher use of the grain in ethanol than previously thought over the past five seasons.
CBOT wheat posted the biggest advance in the grains complex, but traders said the move was primarily technical. Commodity funds hold a large net short position in CBOT wheat futures, leaving the market vulnerable to bouts of short-covering.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.
