- Concerns over Latin America supplies underpin soybean futures
- Strong dollar pressures commodity markets
Adds comment, detail
By Naveen Thukral
SINGAPORE, May 20 (Reuters) – U.S. soybeans on Friday were on track for a sixth consecutive week of gains as concerns over lower supplies from Argentina continued to buoy prices, although a strong dollar curbed their advance.
Wheat has lost about 1 percent this week, while corn is largely unchanged with ample global grain stockpiles anchoring prices.
The Chicago Board of Trade most-active soybean contract Sv1 has risen almost 17 percent in six weeks. By 0252 GMT on Friday, it was trading down 0.1 percent at $10.70-1/2 a bushel.
Recent rallies in soybean futures, driven by fund buying and worries about crop damage in South America, are likely to encourage U.S. farmers to plant more of the oilseed this spring. They may also prompt growers to devote extra acreage to corn in the hope prices will catch up to gains in soy.
But a strong dollar, which makes greenback-priced commodities expensive for importers holding other currencies, limited gains.
The dollar held at its highest in nearly two months against a basket of major currencies early on Friday, on track for a third week of gains as investors awaken to the risk of a hike in U.S. interest rates as early as next month. USD
“The greenback is weighing on commodities although soybean prices are showing substantial resilience,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.
“That resilience hints that the market is well supported for now.”
The U.S. Department of Agriculture reported export sales of U.S. soybeans in the latest week at 556,400 tonnes for 2015/16, above trade expectations, and 158,300 tonnes for 2016/17, in line with expectations. EXP/SOY
Wheat Wv1 rose 0.2 percent to $4.69-3/4 a bushel, while corn Cv1 was unchanged at $3.90 a bushel.
The USDA reported export sales of U.S. wheat in the latest week at 175,200 tonnes for 2015/16, in line with trade expectations, and 573,500 tonnes for 2016/17, above expectations EXP/WHE.
Meanwhile, producers in isolated parts of Brazil’s main grain state of Mato Grosso started harvesting the winter corn crop earlier than expected to take advantage of near record prices, as the drought that has curtailed yields also accelerated the crop’s maturation.
Trader estimates of net fund selling in corn ranged from 14,000 to 15,000 contracts and in wheat from 5,000 to 7,000 contracts. Estimates for fund activity in soybeans ranged from net even to net sellers of 2,000 contracts.
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