U.S. grains: Soybeans rebound from 10-year low

Chicago | Reuters — U.S. soybean futures rose roughly two per cent on Wednesday, rebounding a day after the most active contract fell to a 10-year low as the harvest of a likely record-large U.S. crop got under way, analysts said.

U.S. wheat futures climbed on technical buying and tightening global supplies, while corn futures followed the firm trend.

Chicago Board of Trade November soybeans settled up 16 cents at $8.30 a bushel (all figures US$). The contract on Tuesday fell to $8.12-1/4, the lowest price for a most active contract since December 2008.

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“Soybeans were due for a bounce after four straight down days, probing into contract lows and a 10-year low. It’s about time,” said Ted Seifried, chief agriculture market strategist for broker Zaner Group in Chicago.

Soybeans also appeared to draw support from world stock markets, which broadly rose for a second straight day on bets the ongoing U.S.-China trade spat would inflict less damage than feared. China is the world’s biggest soybean importer.

CBOT wheat rose more than two per cent, with the December contract up 12 cents at $5.22-1/2 a bushel.

Wheat firmed on a mix of chart-based buying, with the December contract approaching resistance at its 20- and 200-day moving averages, along with a pick-up in global export business that has reinforced ideas of tightening global supplies.

Egypt’s main state wheat buyer on Tuesday booked 475,000 tonnes of wheat for two shipment periods, Syria bought about 200,000 tonnes of Russian wheat, and Turkey’s state grain board issued a tender for around 252,000 tonnes of wheat.

Traders were also monitoring dry weather and potential for additional cold temperatures in Australia, a key wheat exporter, following possible frost damage last weekend.

“There is just enough news in here that you are sponsoring a degree of short-covering,” one Chicago trader said. However, he cautioned, volume in CBOT wheat futures was thin. The day’s total estimated volume, at 87,431 contracts, would be the second-lowest since July 9 if confirmed.

CBOT corn futures followed wheat and soybeans higher, with benchmark December up 2-1/2 cents at $3.45-3/4 a bushel, but pressure from the expanding U.S. harvest capped rallies.

“The next couple weeks are going to be rough because guys are going to be more apt to sell corn off the combine than soybeans, which is a bit of a reversal from what we have seen in recent years,” Seifried said.

U.S. producers are more likely this autumn to store their soybeans, Seifried said, in hopes that a resolution to the U.S.-China trade dispute or a weather problem in South America might spur prices higher.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore.

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