Soybean futures rise on crop concerns in South America, wheat regains positions after drop

Chicago soybean futures surged on Friday, Jan. 28, reaching highs not seen since last summer, as the market anticipated drought losses in South America that could curb global export supplies, Reuters writes.

Reportedly, wheat rose after a two-day slide, attracting bargain-buying and traders hunting for short-covering, as investors closely monitor a standoff between Russia and the West over Ukraine that has fuelled fears of disruption to Black Sea grain shipments.

Read more: What if War Starts Tomorrow. Agriproducers, Port Operators and Traders on High Alert in Ukraine

Corn futures gained with the rally in beans and wheat, with corn reaching more than a seven-month high in midday trading. Corn also saw support from strength in the crude oil markets.

"The most-active soybean futures on the Chicago Board Of Trade (CBOT) settled the day up 21-3/4 cents at USD 14.70 per bushel. Earlier in the session, it reached USD 14.79 per bushel, the highest price since June 15," analysts comment.

CBOT corn settled up 10-3/4 cents at USD 6.36 a bushel, while CBOT wheat settled up 9-1/4 cents at USD 7.86-1/4 per bushel.

"While rainfall in Argentina since mid-January has eased drought, analysts expected yields to have already been reduced for soy and corn crops in much of Argentina and also southern Brazil," the message reads.

Lower forecasts for South American crops have raised expectations of increased U.S. exports, tempering concerns about a lull in Chinese demand in recent months.

Private exporters reported sales of 264,000 t of soybeans to China, 141,514 t of soybeans to Mexico, and 251,500 t of soybeans to unknown destinations, the U.S. Agriculture Department said.

U.S. weather conditions are also starting to be more of a factor in the market, as farmers begin to approach the spring planting season, said Karl Setzer, commodity risk analyst at AgriVisor.

“We are starting to see more interest on long-range models and what impact they may have on seeding and potential acres,” Setzer said in an analyst note.

Soyoil contracts also soared, after Malaysian palm oil futures hit a new all-time high as top producer Indonesia limited exports.

And record prices for palm oil, which competes with soybean byproduct soyoil, and a rally in crude oil have also lent support to soybeans this week.

Previously reported that US soybean futures surged on Jan. 26 backed by stronger soybean oil futures and historically high palm oil prices.