(Reuters) – U.S. soybean futures were little changed on Thursday, hovering around their lowest in almost a week as the outlook for the crop in South America improved.
Wheat edged higher on bargain-buying after sliding 2.7 percent in the last session to its weakest in three-and-half years.
FUNDAMENTALS
Recent rains in hot and dry areas of Argentina have boosted the outlook for soybean production. The market is closely watching South American weather amid strong demand from from China, the world’s top soybean importer.
Global buyers are expected to shift their purchases to Brazil and Argentina from the United States as the harvest approaches.
Argentina will jump-start soy exports over the weeks ahead as farmers, who have hoarded beans to protect themselves from the weakening peso and galloping inflation, are forced to sell by the time harvesting starts in March.
In Brazil, strong yields in the country’s top soy-growing state Mato Grosso should guarantee a record harvest for the country in the 2013/14 crop year.
The U.S. Department of Agriculture attache in Brazil on Tuesday estimated Brazil’s 2013/14 soybean crop at 89.5 million tonnes, above the USDA’s official forecast of 89 million tonnes and sharply up from 81.6 million tonnes last year.
A crop of 90 million tonnes would put Brazil ahead of the United States as the world’s top soy producer for the first time.
The wheat market, which was supported earlier this week by strong demand and bitter cold weather in the United States, slid to its lowest since mid-2010 on Wednesday.
Temperatures in the southern Midwest winter wheat belt are forecast to run a few degrees below average, with lows in the teens and 20s Fahrenheit (minus 12 to minus 4 degrees Celsius).
Commodity funds sold a net 8,000 CBOT wheat contracts, 7,000 soybean contracts and 6,000 corn contracts, traders said.
MARKET NEWS
Asian shares were in retreat on Thursday as strains in emerging markets returned with a vengeance and the Federal Reserve further scaled back its stimulus – sending investors scurrying to safety in bonds and the yen.
