U.S. soybean futures rose for a second session on Monday as strong demand from top importer China and concerns over crop damage in Argentina buoyed the market.
Wheat gains were capped by prospects of higher production of the hard red winter wheat crop in the United States.
The Chicago Board Of Trade most-active soybean contract rose 0.2 percent to $10.36-3/4 a bushel by 1111 GMT, having firmed 2.2 percent on Friday.
Corn added 0.3 percent to $3.78-1/2 a bushel while wheat was nearly unchanged, down 0.05 percent at $4.63-1/2 a bushel after rising to $4.67 earlier in the session.
Soybeans are drawing support on expectations of strong demand for U.S. supplies on the back of crop damage in Argentina following unseasonable rains at harvest time.
China’s soybean imports climbed 33 percent in April from a year ago, setting a monthly record amid strong demand for soymeal and soyoil.
The country bought 7.07 million tonnes of soybeans in April, up 15.9 percent as compared with the previous month, preliminary figures issued by the General Administration of Customs showed on Sunday. This is a record for April imports.
Furthermore, it is becoming increasingly clear that the heavy rainfall that lashed Argentina’s pampas in April had a major impact on the size and quality of the crop, analysts said.
“We are looking at very strong demand as China is restocking the hogs herd, which means more demand for soymeal to feed hogs. There are concerns about Argentina’s crop, so the nearby situation is getting bit tighter,” said Kanab Gook at brokerage Okamoto Shoji in Tokyo. “This supply-side weakening of a key competitor coupled with robust demand on the part of the key consumer is giving U.S. suppliers reason to hope that business will be good,” Commerzbank said in a note.
But grain traders remained cautious ahead of the U.S. Department of Agriculture’s monthly world report due on Tuesday that will feature its first supply and demand forecasts for 2016/17.
In Brazil, farmers are taking advantage of a favorable combination of rising global soy prices and a weak local currency to make record volumes of forward sales for the 2016-17 crop.
Wheat crop prospects in Kansas are well above average as rains last month should more than offset the impact of an earlier drought, scouts on an annual tour said on Thursday.
“The good condition of crops in key growing regions such as the U.S. and the EU, and indeed also in Russia, is playing its part in preventing the wheat price from rising much above the 5-1/2-year low it hit in February,” Commerzbank said.
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