(NASDAQ) – U.S. grain and soybean futures notched new highs Thursday as continued demand for U.S. supplies bolstered prices for some crops.
Growing U.S. export-market share in soybeans could result in smaller-than-expected domestic crop stockpiles, the prospect of which helped fuel investor short covering and fund buying on Thursday, lifting the soybean market. Prices for the oilseeds also benefited from speculation that China, the world’s largest soybean buyer, could significantly boost U.S. oilseed imports.
“The U.S. is buying business away from South America that no one dreamed of doing two months ago, and it looks like it is going to continue to do it from the front to the back for the rest of the calendar year,” said Charlie Sernatinger, head of grains trading at ED&F Man Capital Markets, in an afternoon note to clients.
Soybean futures for July rose 44 1/2 cents, or 4.1%, to $11.44 1/4 a bushel at the Chicago Board of Trade, the highest closing price since Aug. 2014.
Corn prices moved to the highest level in nearly 11 months as anticipation of elevated export demand and concerns over adverse weather during the U.S. growing season propped up prices. A brisk export pace earlier this season left Brazil with tighter-than-expected corn supplies, limiting exports from that country and potentially pushing grain buyers to the U.S., analysts said.
“It is going to take months to replenish the pipeline in Brazil,” said Mr. Sernatinger, noting that exporters in the Black Sea region also have little grain on hand to ship until the fall harvest. “If you need corn, the United States of America is the only game in town.”
Still, analysts said adequate domestic and world corn inventories, and decent U.S. crop conditions weighed on the market toward the end of the trading session.
CBOT July corn added 1 1/2 cents, or 0.4%, to $4.15 1/4 a bushel, the highest settlement price since July 17.
Wheat prices advanced to a six-week high, boosted by strength in nearby markets and investor short covering. Prices also were shored up by heavy rainfall in the European Union, a key world wheat producer, where crops are in need of relief from too much wet weather.
CBOT July wheat gained 11 3/4 cents, or 2.5%, to $4.85 1/2 a bushel, the highest closing price since April 21.
Read more: http://www.nasdaq.com/article/us-grains-soybeans-post-fresh-highs-on-demand-optimism-20160602-00980#ixzz4AWR4VFTp
