U.S. grains: Soy extends climb, wheat jumps

Dry weather elsewhere supports wheat futures

Chicago | Reuters — Chicago soybean futures extended their bull run on Friday, reaching a two-year top as top global buyer China continued with daily purchases of U.S. soybeans.

Wheat futures surged more than three per cent on fears of tightening supplies from key exporters, and corn futures rose for a third straight session.

Chicago Board of Trade November soybeans settled up 15 cents at $10.43-1/2 per bushel after reaching $10.46-3/4, a contract high and the loftiest price on a continuous chart of the most-active soybean contract since May 2018 (all figures US$).

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CBOT December wheat ended up 18-3/4 cents at $5.75 per bushel after touching $5.78, the contract’s highest since Feb. 21. December corn settled up 3-1/4 cents at $3.78-1/2 a bushel.

With Friday’s higher close, soybeans have risen in 17 of the last 19 sessions and recorded a sixth straight weekly advance, buoyed by a streak of daily Chinese purchases of U.S. supplies.

The U.S. Department of Agriculture confirmed U.S. soy sales to China in each of the last 11 business days, including Friday’s announcement of 132,000 tonnes. USDA also reported sales of 210,000 tonnes of U.S. corn to China and 100,000 tonnes of soymeal to unknown destinations.

“China had a whole industry devoted to taking food waste and feeding it to hogs, and that’s illegal now. So they are rebuilding their herds, and they are having to do it with corn and soybean meal,” said Jim Gerlach, president of Indiana-based A/C Trading.

As it rebuilds its massive hog herd following a devastating outbreak of African swine fever, China is also looking to fulfil commitments in a trade pact with the United States and avert tensions in food supply, analysts said.

In wheat, the CBOT December contract neared a seven-month high as worries about dry weather curbing crops in Argentina, Europe and the Black Sea region sparked fund-driven buying.

“Those are three pretty big exporters of wheat,” Gerlach said.

The number of wheat fields in northern Argentina that will not be harvested due to drought is growing, the Buenos Aires Grains Exchange said on Thursday.

Traders were also assessing news that Algeria moved to open its wheat purchase tenders to Russian and Ukrainian grain.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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