(Reuters) – U.S. soymeal rose to a seven-week high on Thursday as a slow start to a record soybean harvest and traffic congestion on the country’s railroads prompted processors to cover short cash positions in the futures market.
Soybeans were little changed after hitting a seven-week peak, while corn was trading at its highest since July 18 in step with the gains in soymeal prices.
Wheat rose 0.4 percent to a two-month top with adverse weather in United States and the Black Sea region buoying the market.
Chicago Board of Trade front-month soymeal had climbed 1.2 percent to $401.9 a short ton by 0218 GMT, its highest since Sept. 12, and soybeans were almost flat at $10.42-1/2 a bushel after climbing to a seven-week peak.
Corn was unchanged at $3.75-1/4 a bushel, after climbing to its highest since July 18 and wheat added 0.4 percent to $5.40-1/4 a bushel, a two-month high.
Still the rally could be short-lived as prices are likely to ease when record crops hit the market, said Simon Clancy, a director at IKON Commodities in Sydney.
“With such big crops being harvested there are going to be ample supplies of meal and oil,” he said. “It looks to be a near term issue with soymeal supplies and when that does rectify itself the market will come under pressure again.”
Record U.S. soybean and corn harvests have boosted demand for hopper cars already in short supply, while rail traffic has slowed on tracks clogged with tankers hauling oil produced from fields in the northern U.S. Plains and Canada.
The corn harvest is 46 percent done, below the average pace of 65 percent, the USDA said in a weekly report on Monday. The soybean harvest is 70 percent complete, below the five-year average of 76 percent but up from 53 percent a week ago.
On Wednesday, corn futures were further bolstered by U.S. Energy Information Administration data showing the largest weekly ethanol grind since mid-August but the smallest stocks of the grain-based biofuel since May.
Funds bought an estimated 16,000 CBOT soybean contracts, 8,000 soymeal contracts and 10,000 corn contracts, traders said.
The support for wheat market stemmed from concerns about tightening global supplies. Cold weather in Russia is pushing the 2015 crop into early dormancy, and dryness is stressing late-heading wheat in southern Australia.
Russia could see a smaller wheat harvest in 2015 due to unfavourable weather during winter grain sowing, said consultancy IKAR. The crop could fall as low as 46.5 million tonnes from an expected 58.5 million this year, although IKAR cautioned that its figure was preliminary and pessimistic.
The USDA estimated the condition of winter wheat at 59 percent good-to-excellent, well below analyst expectations of 68 percent.
