Chicago | Reuters — Chicago soybean futures rose on Thursday on uncertainty over Brazil’s trucker strike, which threatens to stall movement of the new harvest of the grain onto the world market, traders and analysts said.
Chicago corn and wheat also ended higher, tracking the strength in soybeans.
Chicago Board of Trade March soybeans ended 16-1/4 cents, or 1.6 per cent, higher at $10.24 a bushel (all figures US$).
“Until the Brazilian trucker strike is resolved, all you are going to do is give the shorts a reason to cover and keep the new sellers waiting for the beans to move into the world market,” said analyst Terry Roggensack of The Hightower Report.
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“The supply is daunting,” added Roggensack. He said Brazilian farmers were poised to harvest a record soybean crop and that the world stockpile was set to hit a new high of 89 million tonnes.
The strike, now in its second week, has crippled supply chains as truckers blocked roads protesting a higher fuel tax. Some truckers agreed to end the strike after the government late Wednesday said it would extend a year of free financing for vehicles and pass a law to benefit the sector.
But blockages remained on Thursday afternoon on 91 roads in nine states, including top grain producers Mato Grosso and Parana, where harvest is peaking.
CBOT March corn closed up 4-1/4 cents, or 1.1 per cent, at $3.80. March wheat ended 5-1/2 cents, or 1.1 per cent, higher at $5.03-1/4 after closing steady to lower the past six days.
“I’m surprised we were lower earlier considering the farmer isn’t selling anything and prices keep going down,” said CHS Hedging wheat analyst Charles Soule. “Wheat bounced back late with the row-crops.”
Kansas City wheat futures set 4-1/2 year lows earlier in the session on a gloomy export outlook, a firm dollar and outlooks for much-needed moisture to improve the condition of the dormant hard red winter wheat crop. Life-of-contract lows were also hit in most CBOT, K.C, and MGEX wheat futures contracts.
While the U.S. Agriculture Department on Thursday said U.S. weekly exports sales of wheat were up 23 per cent from the prior week at 328,300 tonnes, year-to-date commitments remain 30 per cent below a year earlier.
“Clearly the market is still worried about the accumulation of U.S. inventories and the potential for a large Hard Red Winter crop in the season ahead,” Commonwealth Bank of Australia analyst Tobin Gorey said.
— Christine Stebbins is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Nigel Hunt in London and Naveen Thukral in Singapore.
