Grain futures advance, soybeans rise a second week on China demand outlook

Grain futures advanced on Friday, soybeans touched a 5-month high, capping a second weekly gain, after the US Department of Agriculture predicted on Thursday that demand for the US oilseed from China, the largest global importer of the grain will increase. Corn advanced a fourth week, while wheat registered a second weekly advance. Meanwhile, the Chicago Board of Trade remained closed on Monday, due to a federal holiday honoring the birthday of the first President of the US, George Washington.

On the Chicago Board of Trade, soybeans futures for settlement in March declined 0.5% to settle at $13.3825 per bushel on Friday. However, earlier prices touched a session high at $13.5588 per bushel, the strongest level since September 19, while day’s low stood at $13.3712 per bushel. The grain also settled the week 0.5% higher, after adding 3.7% in the previous 5-day period. The oilseed has lost 8.5% in 2013.

The US Department of Agriculture reported on Thursday that US soybeans exporters shipped 72% of their production to China in the week ended February 6th. The USDA added that old-crop soybeans shipments reached 173 644 tons in the week ended February 6, marking a 25% increase for the four-week average compared to the same period a year ago.

A separate report by the same government agency showed that Chinese imports may rise to 72.8 million metric tons in the 2014-2015 season, compared to 69 million tons in the previous year.

DTN.com reported on February 14 that showers and somewhat lower temperatures will ease some stress to filling soybeans in southern Brazil at the end of the week and early in the weekend. A return to hotter and drier period may start early next week, before more showers develop late in the week. According to the website, the rainfall may not be sufficient enough to ease concerns over the diminished soil moisture, but will certainly be beneficial.

Meanwhile, soybeans and corn producing regions in central Argentina will benefit from adequate to surplus soil moisture, except some areas where recent heavy storms have caused serious flooding. According to the website, a break in the action may occur soon, which will increase temperatures and lower the chances for heavy rains. The latter will be beneficial for most of the crops.

Elsewhere on the grains market, corn futures for March delivery added 1.23% to settle at $4.4563 a bushel on Friday. Futures hit a session high at $4.4588 per bushel, while day’s low was touched at $4.3838 per bushel. The grain capped a fourth weekly advance by increasing 0.3% last week. However, corn has lost nearly 40% in 2013, the steepest annual drop on record and the worst annual performance since at least 1959.

Wheat touches 5-week high

On the Chicago Board of Trade, wheat futures for settlement in March rose by 0.35% to settle at $5.9750 per bushel on Friday. Prices touched a session high of $6.0288 per bushel, the strongest level since January 8, while day’s bottom was touched at $5.9450. The grain settled the week 3.4% higher, after adding 4.1% in the previous 5-day period, the biggest weekly gain since the period ended September 27.

However, wheat slumped 22% last year, marking the largest annual decline since 2008, on expectations for a record global output of 712.7 million tons, according to data by the US Department of Agriculture.

DTN’s February 14th forecast called for a moderation in temperatures over the Midwest during the next few days, after which they will get even higher in the six-to-ten-day period. The warmer weather conditions will favor the red winter wheat, but may also melt the protective snow cover. In the long-term, there are chances for heavier snow, ice and rainfall as storm threats increase in the six-to-ten day period.

Meanwhile, the website reported that in the Southern Plains a much warmer trend is expected during the weekend, easing stress to winter wheat. However, this will also diminish soil moisture. Longer-range forecasts are hinting for more active weather pattern over the eastern Plains, Midwest and the Delta, but for now predictions remain sloppy.