Soybean Futures Rise; Grains Succumb to Pressure
Dry weather in Argentina bolstered U.S. soybean futures on Monday, while grain futures retreated from early gains.
Traders' primary focus was on weather conditions in Argentina, after weekend rains fell short of expectations. That left around half of the Argentine corn and soybean crops at risk of dry stress until the middle of the month.
Continued dryness beyond that point would begin to cut into Argentina's soybean yield, said Tomm Pfitzenmaier of Summit Commodity Brokerage.
Soybean futures for January rose 0.4% to $9.98 1/2 a bushel at the Chicago Board of Trade. December corn futures, which were higher overnight, fell 1.5% to $3.39 1/2 a bushel. December wheat futures also reversed course to close 1% lower at $4.10 1/4 a bushel.
Promising demand prospects for American oilseed helped soybean prices, said Don Roose, president of U.S. Commodities, but global oversupply of corn and wheat checked gains in those markets.
"It's a reminder of the big supplies; that's the bottom line," Mr. Roose said. "In the beans we have a huge chugging engine of demand under us, the Chinese, whereas in the corn we don't."
Fund managers are also more optimistic about soybean prices than corn or wheat. The Commodity Futures Trading Commission said last week that money managers increased their net long position in the soybean market by 57% to 31,662 futures and options contracts, while preserving net shorts in grain contracts.
Traders were looking to weather problems elsewhere in the world for potential supply threats. Brazilian corn and soybean crops are currently benefiting from plentiful rainfall, and some analysts expect those crops to grow.
Heavy rain in southeastern Australia over the weekend caused some damage to the wheat crop, cutting into production forecasts. But analysts said the damage wasn't as bad as expected.
The "region seems to have received a lot less rain than was feared," said Tobin Gorey, an agricultural analyst at the Commonwealth Bank of Australia. "The region has probably not [escaped] completely unscathed."
Outside markets added to the pressure on grain prices Monday: The U.S. dollar was higher, making exports more expensive, while falling crude oil futures weighed down other commodities.
Write to Benjamin Parkin at benjamin.parkin@wsj.com
(END) Dow Jones Newswires
December 04, 2017 15:35 ET (20:35 GMT)