Soybeans closed higher Thursday on continued worries about dry weather in Brazil and reports that China is back in the market for U.S. supplies.
Showers were limited in the center-west and center-south of Brazil in the past 24 hours with temperatures in the mid- to upper-90s in southwestern Brazil, according to Commodity Weather Group. Dry weather will return to more than a third of the South American country’s corn and soybean area and much of its cofffee and sugar regions after the middle of January.
Temperatures in the 90s also will start to become more frequent and widepread in northern and central Brazil, which will draw down soil moisture starting next week, the forecaster said.
Traders have been in limbo from a fundamental standpoint as the partial government shutdown, now in its 13th day, has kept the U.S. Department of Agriculture from releasing daily and weekly export sales reports. Inspections of soybeans were higher week-to-week in the seven days through Dec. 27, while corn and wheat assessments declined, the USDA said in a report earlier this week.
China may be back in the market for U.S. soybeans after taking a holiday break, Bloomberg reported on Thursday, citing four traders familiar with the trade process.
China’s top food buyer, Cofco Corp., was asking for prices for delivery in February and March, though the company didn’t make any purchases, according to the news company. AgResource, however, reportedly said state-run buyers probably purchased about 1.5 million metric tons.
Soybean futures rose 3½¢ to $9.10½ a bushel on the Chicago Board of Trade. Soymeal added $1.40 to $316.30 a short ton, and soy oil futures gained 0.20¢ to 28.38¢ a pound.
Corn futures for March delivery added 4½¢ to $3.80¼ a bushel.
Wheat gained 7¼¢ to $5.14 a bushel and Kansas City futures jumped 11¢ to $5.03½ a bushel.
WEDNESDAY’S MARKET RECAP
Soybeans and grains started 2019 higher on concerns about dry weather in Brazil and on a lack of news about exports from the U.S.
Dry weather is expected for at least the first 10 days of the year in major Brazilian growing states including Mato Grosso, Rio Grande Do Sul, and Parana, which could threaten production in the country.
The U.S. Department of Agriculture has pegged output in the South American country at 122 million metric tons, up from 120.3 million tons last year. Decent weather through November gave crops a boost, but dryness since may become a problem.
The partial government shutdown, meanwhile, is now entering its 12th day. Certain government reports have been canceled during the shutdown, which has left producers, analysts, and traders all guessing who’s buying soybeans and grains. That’s causing angst in Chicago as investors are lacking important fundamental data they normally rely on to make trading decisions.
Soybean futures jumped 11¾¢ to $9.05¾ a bushel on the Chicago Board of Trade. Soymeal gained $1.70 to $311.60 a short ton, and soy oil added 0.21¢ to 28.06¢ a pound.
Corn was up ¾¢ to $3.75¾ a bushel.
Wheat for March delivery added 5¢ to $5.08¼ a bushel while Kansas City futures gained 5¼¢ to $4.94 a bushel.
