Soy price up to 7-month top as Brazil crop estimates shrink

Soy price up to 7-month top as Brazil crop estimates shrink

CHICAGO: U.S. soybean futures rose to a seven-month high Tuesday on fears that a smaller-than-expected Brazilian harvest will tighten global soy stocks and steer export demand to U.S. supplies, analysts said.

Corn futures followed soybeans higher and wheat firmed on bargain-buying after a 3% dip a day earlier. The grains also drew support from geopolitical risks to supplies from Black Sea exporters Russia and Ukraine.

Chicago Board of Trade March soybean futures settled up 38 cents at $15.28-1/2 per bushel after rising to $15.39, a contract top and the highest on a continuous chart of the most-active contract since June 11. CBOT soymeal futures also set contract highs.

The soybean market got a boost after commodity brokerage StoneX lowered its estimate of Brazil's soy harvest to 126.5 million tonnes, from 134 million last month.

"If today's number verifies, we could see a dramatic increase in demand for U.S. soybeans this summer as Brazilian exportable supplies get tight," Arlan Suderman, StoneX chief commodities economist, wrote in a client note.

A day earlier, consultancies AgRural and AgResource cut their Brazilian soy crop estimates to 128.5 million and 125 million tonnes, respectively, citing poor weather.

The Lunar New Year holiday in China and other Asian countries was curbing international oilseed demand, traders said. Nonetheless, the U.S. Department of Agriculture confirmed private sales of 132,000 tonnes of U.S. soybeans to China along with 110,000 tonnes of U.S. corn to Mexico.

CBOT March corn futures settled up 8-3/4 cents at $6.34-3/4 a bushel and March wheat rose 7-3/4 cents to finish at $7.69 a bushel.

Traders continue to monitor political tension between Russia and Ukraine, both major exporters of wheat, while Ukraine is a key global supplier of corn as well. Russian President Vladimir Putin accused the West on Tuesday of ignoring Russia's security concerns and deliberately creating a scenario designed to lure it into war.

Uncertainty about Ukraine helped support CBOT wheat futures along with technical buying and short-covering one day after the benchmark CBOT March contract tumbled 3%.

"We overdid it yesterday. Technically the (wheat) market broke down," said Don Roose, president of Iowa-based U.S. Commodities.

Rallies were limited by forecasts for a winter storm to bring much-needed moisture to the U.S. Plains and Midwest winter wheat belt on Wednesday and Thursday, potentially bolstering production prospects.= Reuters

https://www.thestar.com.my/business/business-news/2022/02/02/soy-price-up-to-7-month-top-as-brazil-crop-estimates-shrink