Soybeans rise for second session on Argentina drought, wheat firms
SINGAPORE — Chicago soybeans gained more ground on Monday, as prices were supported by dry weather in key supplier Argentina and expectations of higher demand in China, amid easing COVID restrictions.
Wheat edged higher, recouping last session’s losses, although record supplies from the Black Sea region curbed gains.
The most-active soybean contract on the Chicago Board of Trade (CBOT) rose 0.2% to $14.94 a bushel, as of 0302 GMT, wheat gained 0.2% at $7.45-1/4 a bushel and corn was unchanged at $6.54 a bushel.
Adverse crop weather in Argentina is underpinning the soybean market.
“Argentina forecast is still too dry, and stressful conditions continue to a high percentage of Argentina and southern Brazil crops,” the Hightower said in a report.
“The weather outlook is uncertain and traders are nervous that a continued drier than normal trend over the next 2-3 weeks could cause significant production losses in Argentina.”
Travelers streamed into China by air, land and sea on Sunday, many eager for long-awaited reunions, as Beijing opened borders that have been all but shut since the start of the COVID-19 pandemic.
China is by far the biggest soybean importer and demand in expected to rise as travel resumes.
For wheat, the availability of abundant low-priced supplies from Russia and Ukraine are giving stiff competition to other global exporters, traders said.
Reports of a record crop expected in Australia, the world’s second-largest exporter of the grain, also weighed on prices.
However, costs for hiring ships to transport commodities from the Black Sea have risen by more than a fifth since the start of the year, reflecting higher war risk insurance rates, industry sources said.
A surge in the cost of most food commodities last year, as the disruption caused by Russia’s invasion of Ukraine raised concerns of shortages, sent the U.N. food agency’s average price index to the highest level on record.
The Food and Agriculture Organization’s (FAO) food price index, which tracks international prices of the most globally traded food commodities, averaged 143.7 points in 2022, up 14.3% from 2021, and the highest since records started in 1990, the agency said on Friday.
Large speculators raised their net long position in CBOT corn futures in the week to Jan. 3, regulatory data released on Friday showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and raised their net long position in soybeans. (Reporting by Naveen Thukral; Editing by Rashmi Aich)
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