Grain futures mixed, soybeans advance for a fourth day on increased Chinese demand

Grain futures were mixed on Tuesday, with soybeans advancing for a fourth day on increased Chinese demand. Wheat also advanced, while corn declined.

On the Chicago Board of Trade, soybeans futures for settlement in March surged by 0.13% to trade at $12.9438 per bushel by 14:47 GMT. Prices swung between day’s high and low of $12.9888 and $12.9112 per bushel respectively. On January 2nd prices touched $12.6262 per bushel, the lowest since November 8th. The oilseed settled last year 8.5% lower.

Data by the US Department of Agriculture released yesterday, showed that China, the largest soybeans importer, concluded a deal for 140 000 metric tons of US grain. The data also revealed nearly 40% increase in US exports to China with a total amount of 26.1 billion tons since the beginning of the marketing year on September 1st.

“The high Chinese demand dynamism has so far remained intact, soybean prices have been able to profit from this,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, cited by Bloomberg.

The weather will be mostly favorable in Brazil, while at the same time, weather conditions may be stressful for the developing soybeans and corn in Argentina. DTN’s January 13th forecast called for mostly dry weather in Argentina during the next five days, followed by a return to very hot weather. The website reported that the last weeks rainfall in the major corn and soybeans areas was disappointing. The developing corn and soybeans crops may be stressed, especially as the corn started entering pollination. The next probability of scattered thundershowers and a bit lower temperatures may occur during the weekend.

Meanwhile, conditions in the Brazilian soybeans producing regions, Rio Grande and La Pampa remain favorable. The developing soybeans crop will benefit from scattered showers and thunderstorms, which will recharge the soil moisture. The filling soybeans in the Mato Grosso area will also be favored by enough rainfall.

Elsewhere on the grains market, corn futures for March delivery traded little changed at $4.3163 a bushel by 15:03 GMT, losing 0.04% for the day. Futures held in a range between day’s high and low of $4.3388 and $4.3113 per bushel. On January 10th prices touched $4.0638 per bushel, the lowest since August 2010. The grain lost nearly 40% in 2013, the steepest annual drop on record, on projections that the global output will surge to 964.3 million tons in the 2013-2014 season, boosted by record production in the US, the world’s top producer.

Wheat advances

On the Chicago Board of Trade, wheat futures for settlement in March rose by 0.20% to trade at $5.7413 per bushel by 15:04 GMT. Prices jumped to a session high of $5.7438, while day’s bottom was touched at $5.7062 per bushel. On January 10th, prices touched $5.6088 per bushel, the weakest level since July 2010. Last 5-day period, wheat registered a six consecutive week of declines, the longest losing streak since October 2011. The grain slumped 22% in 2013, the largest annual decline since 2008, on expectations for a record-high global output of 711.42 million metric tons, according to data by the USDA.

Prices were supported after Jordan announced it is seeking to buy 100 000 tons of the grain in a tender tomorrow.

Weather forecasting models were also supportive, pointing to mostly favorable conditions in the Midwest and the Southern Plains. DTN reported on January 13th that colder temperatures will return during the week, but are nowhere near to the freezing temperatures that occurred during the first half of the winter period. Meanwhile, no damaging cold is expected in the next 10 days over the Southern Plains, with mostly dry weather during this period. According to the website, the wheat crop is generally in good condition.