Soybeans Slightly Higher Overnight

(Agriculture.com) – SOYBEANS MODESTLY HIGHER OVERNIGHT AS INVESTORS HOPE LOW PRICES SPUR DEMAND

Soybeans were modestly higher in overnight trading as bargain-hunters jump into the market to snap up cheap contracts in the hopes low prices will spur demand.

Soybeans dropped below $9.50 on Tuesday after the U.S. Department of Agriculture raised its production forecast well beyond expectations. The government said on Monday that growers will harvest 4.2 billion bushels of beans on yields of 50.6 bushels an acre, up from a prior outlook for 48.9 bushels an acre.

Corn yield projections were lowered, though not by as much as expected, to 174.4 bushels an acre, down from an August forecast for 175.1 bushels.

Investors are hoping that the low prices will cause overseas buyers to seek U.S. supplies. The USDA will release its weekly export sales report on Thursday morning.

Soybeans for November delivery rose 2 ½ cents to $9.46 ½ a bushel overnight on the Chicago Board of Trade. Soymeal futures for December delivery gained $2 to $308.10 a short ton and soy oil lost 0.03 cent to 31.82 cents a pound.

Corn futures for December delivery rose a ½ cent to $3.30 ½ a bushel in Chicago.

Wheat futures for December delivery declined ¼ cent to $4.00 ¾ a bushel in Chicago, while Kansas City futures were unchanged at $4.15 ¾ a bushel.

U.S. FILES CHALLENGE WITH WTO TO CHINESE PRICE SUPPORTS FOR GRAINS

The U.S. has filed an official challenge with the World Trade Organization (WTO) saying that China is giving its farmers too much support for domestically grown rice, wheat and corn, making it difficult for American growers to do business in the world’s second-largest economy.

China’s market price support – subsidies essentially given to growers by the government – far exceed the levels agreed upon when China joined the WTO, the U.S. claims. The subsidies distort Chinese grain prices and undercut American farmers, Trade Representative Michael Froman said in a statement on Tuesday.

China, on the other hand, said late yesterday that it has done nothing wrong. The first step in resolving the issue is for the sides to have formal meetings.

The Obama administration has lodged 14 complaints against China since 2009, along with several others, and won each one of them, according to a statement on the U.S. Trade Representative’s website.

Agriculture Secretary Tom Vilsack said in the statement that China has gone from a $2 billion-a-year market to a $20 billion-a-year market for U.S. farmers, but the field of competition needs to be level to ensure fair competition.

“Unfortunately, China’s price supports have encouraged wheat, corn and rice production in China that has displaced imports,” Vilsack said. “When China joined the WTO, it committed to limit this kind of trade-distorting support, which it has failed to do. This has resulted in significant losses to American producers. We see substantial opportunities to meet import demand for grains in China if China is willing to operate a WTO-consistent trade regime.”

FLOODS CAUSED BY LOCALLY HEAVY RAIN IN NORTHWEST MISSOURI

Flooding continues in parts of the Midwest – today it’s the Platte River overflowing its banks near St. Joseph, Missouri, according to the National Weather Service.

Heavy rain is causing flooding in much of northwest Missouri including the towns of St. Joseph, Atchison, Cameron and Savannah, the NWS said. A flood warning has been issued for the Platte.  As of 1:30 a.m., the river was at 19.4 feet, with flood stage at 20 feet. The river is expected to reach 22.2 feet by this afternoon.

Flood warnings also persist in small pockets in Illinois as scattered thunderstorms are expected this afternoon, according to the weather service. Severe weather isn’t expected, though locally heavy rainfall is expected in much of central Illinois.