U.S. grains: Soybeans firm as South American crops struggle

Chicago | Reuters — Chicago soybean futures ended higher on Friday as continued dryness in South America threatened to stress the crop in Brazil and Argentina, while strong export demand strengthened corn and wheat.

Chicago Board of Trade’s most-active soybean futures added 7-3/4 cents to $11.91-3/4 a bushel, ending the week up 10-3/4 cents for the fourth consecutive week higher and hovering around Monday’s four-year high of $12 per bushel (all figures US$).

CBOT corn gained 6-1/4 cents to $4.33-3/4 a bushel after matching Monday’s $4.36 per bushel life-of-contract high, while wheat added 9-1/2 cents to $6.06 a bushel.

For the week, CBOT corn gained 5-3/4 cents and CBOT wheat added six cents, both up for second consecutive weeks.

Prolonged dryness is expected to reduce yields in key crop-growing regions of South America, supporting U.S. soybean futures.

“If they end up being mediocre-to-poor, it certainly tightens the balance sheet up and will bring world buyers back to the United States,” said Chuck Shelby, president of Risk Management Commodities.

Softer soybean export sales capped gains, as weekly sales fell to a marketing-year low 768,100 tonnes, according to the U.S. Department of Agriculture (USDA).

Sales to China reached four-month lows at 578,700 tonnes, with 66,000 tonnes in sales switched from China to Egypt.

“It’s still a really robust number. China is in for a big portion of that,” said Ted Seifried, vice-president and chief market strategist at Zaner Group. “We are very much in danger of running out of soybeans between now and the end of the marketing year.”

Private sales of 302,160 tonnes of corn to Mexico for shipment in the 2020-21 marketing year bolstered strong weekly exports last week totaling 1.67 million tonnes, according to USDA.

Wheat export sales notched a marketing-year high of 795,800 tonnes for the week ended Nov. 19, led by 333,000 tonnes to China, its biggest weekly U.S. wheat purchase since March.

— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.