Grains trading outlook: soybeans hit 1-1/2-years high on strong demand, wheat gains

Soybeans rose for a fourth day to hit the highest level in 1-1/2 years after data showed record-high demand from US millers and as Chinas economy cooled down less than expected in the first quarter. Wheat rose as unfavorable weather conditions in the US continued to stress the crop, despite a note of improvement, and as the crisis in Ukraine deepened. Corn rose as well.

On the Chicago Board of Trade, soybeans futures for settlement in July traded at $15.150 per bushel at 01:52 GMT, up 0.41% on the day. Prices shifted in a daily range between $15.2100 a bushel, the highest level since the end of October 2012, and $15.0640 a bushel. The oilseed added 1.4% on Wednesday, a third straight daily advance, and is up 4.8% so far this week.

Soybeans drew solid support on increasing tightness in US supplies as domestic demand picked up. According to a report by the National Oilseed Processors Association, US mills crushed 153.84 million bushels of soybeans last Month, up 12% from a year earlier. The USDA said last week that US stockpiles will amount to 135 million bushels at the end of August, down from 141 million last year.

Slightly better-than-expected data from China, the worlds biggest consumer, also helped push soybeans up. The Asian economy grew by 7.4% in the three months through March, beating analysts’ expectations for a slowdown to 7.3%. However, this was still the slowest growth in six quarters and below the government’s targeted 7.5% expansion. Quarter-on-quarter, the Asian economy matched projections and grew by 1.4%, compared to the preceding period’s 1.8% expansion.

Elsewhere on the market, wheat futures for settlement in May were up 0.47% to trade at $6.9120 per bushel, having varied in a daily range between $6.980 and $6.864 per bushel. The grain fell by 1.96% on Wednesday after it had added 6.2% in the previous two days.

Wheat rebounded from yesterdays losses on fears turmoil in Ukraine may disrupt supplies, while unfavorable weather conditions in the US continued to stress the crop.

DTN reported on Wednesday that light showers may ease stress on wheat in the Southwest Plains to some extent, however precipitation will remain limited, keeping high pressure on the crop.

In news from the rest of the world, DTN reported that dry weather in central Argentina next week will provide favorable conditions for maturing crops and harvesting, as well as for preparation of winter wheat planting.

In Ukraine, recent showers have helped ease stress on winter and spring grains, but more is needed, DTN said. In Russias southern and western growing areas and the west New Lands region, dry conditions have put crops under risk and precipitation is needed.

Elsewhere on the grains market, corn futures for settlement in July traded at $5.044 per bushel, up 0.2% on the day. The grain varied in a daily range between $5.070 and $5.032 a bushel. Prices declined 1.2% on Wednesday and settled at $5.034 a bushel.