U.S. grains: Export hopes push soy, corn, wheat futures higher

Chicago | Reuters — U.S. soybean, corn and wheat futures rose on Thursday as recent declines spurred demand for imports of all three commodities, traders said.

Bargain-buying and short-covering contributed to the bullish tone following a sharp sell-off across the commodities market as the coronavirus pandemic roiled demand.

“None of the major commodities have a strong story, but recent losses have been sharp, and few speculators want to hold onto big short positions at these price levels amid the possibility that China might step up purchases,” Arlan Suderman, chief commodities economist at INTL FCStone, said in a note to clients.

China is preparing to buy more than 30 million tonnes of crops for state stockpiles to help protect itself from supply chain disruptions caused by the coronavirus pandemic and make good on pledges to buy more U.S. crops, three sources told Reuters.

China plans to add about 10 million tonnes of soybeans, 20 million tonnes of corn and one million tonnes of cotton to its state reserves, said two of the sources, who were briefed on the government plan.

“The talk of Chinese buying won’t die, and if they ever wanted to shore up their reserve, they aren’t going to find a better price for a while,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital, said in a note to clients.

Chicago Board of Trade July soybean futures settled up 4-1/4 cents at $8.46-3/4 a bushel (all figures US$).

U.S. exporters signed deals to send 272,000 tonnes of soybeans to China, the U.S. Agriculture Department said on Thursday. It was the second day in a row that USDA has announced a sale to the world’s top soy importer.

CBOT July soft red winter wheat ended one cent higher at $5.44-3/4 a bushel.

Saudi Arabian grain importer SAGO issued an international tender to buy 655,000 tonnes of wheat for delivery in July and August, the state-run body said on Thursday.

Expectations for export curbs in Ukraine and Russia as well as concerns that dry conditions may limit crop production in the Black Sea region and Europe raised hopes that U.S. exporters may win some of the Saudi business, traders said.

Ukraine faced unfavourable weather conditions in the first half of this month and very dry air reduced already low moisture reserves in the soil, APK-Inform agriculture consultancy said on Thursday.

CBOT July corn was 1-1/4 cents higher at $3.26 a bushel.

— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.