Soybean futures firm as investors track Argentine weather

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CHICAGO, Dec 29 (Reuters) –

Chicago soybean futures rose on Thursday, after rallying earlier in the day to the highest price since June, as investors tracked forecasts for much-needed rain across Argentine crops and China’s dropping of strict COVID-19 measures.

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But the price rally was capped by investors looking to capture profits and adjust their positions before the end of the year, traders said.

“They’re backing off on what they want to hold and carry over into the New Year, even with both the dollar and crude oil being down,” said Karl Setzer, brokerage research lead at Mid-Co Commodities.

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“That normally would be giving the grain market a boost, but not today,” Setzer said.

Wheat and corn eased from multi-week highs struck in the previous session, as traders awaited a clearer assessment of frost damage to U.S. wheat crops and as mounting COVID-19 infections in China tempered demand hopes.

Some participants booked profits after the rally in grains that may have been amplified by thin holiday volumes, traders said.

The most-active soybean contract on the Chicago Board of Trade (CBOT) ended the day up 2 cents, settling at $15.16-1/4 a bushel.

CBOT wheat closed the day down 11-1/2 cents, settling at $7.74 a bushel, while corn eased down 3-1/4 cents at $6.79-1/2 a bushel.

Crude oil fell as a surge in COVID-19 outbreaks in China created concern about short-term disruption, even as investors saw potential for a demand upturn next year as the country re-opens.

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Drought in Argentina, the world’s largest exporter of soyoil and soymeal, is threatening prospects for next year’s soybean harvest. After less than expected rainfall last weekend in the country’s main growing belt, attention has turned to showers forecast in the week ahead.

U.S. wheat markets remained capped by Russian competition in export markets, highlighted by a purchase of 200,000 tonnes of Russian wheat by Egypt this week. (Additional reporting by Gus Trompiz in Paris, Michael Hogan in Hamburg and Naveen Thukral in Singapore; editing by Barbara Lewis, David Gregorio and Nick Macfie)