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GRAINS-Soybeans near 2-year peak on U.S. weather concerns, fund buying

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  • Soy up for 4th day as La Nina seen hitting U.S. crop
  • Chicago corn, wheat futures dip after 6-session rally

Adds details, quotes

By Naveen Thukral

SINGAPORE, June 9 (Reuters) – U.S. soybeans gained for a fourth consecutive session on Thursday, trading close to a two-year top as the market was buoyed by forecasts of a dry growing season in the United States.

Corn and wheat futures, which have risen for the last six sessions, ticked lower as the grain markets took a breather.

“Strong gains that we have seen in soybeans are in response to some of the supply concerns in South America and there is nervousness that U.S. won’t perform well because of La Nina weather,” said Phin Ziebell, agribusiness economist at National Australia Bank.

“Where we go from here will all depend on what happens to the U.S crop.”

Chicago Board of Trade most-active soybean contract Sv1 edged 0.1 percent higher at $11.78-1/2 a bushel by 0221 GMT. The market rallied 3.2 percent on Wednesday when prices hit their highest since June 2014 at $11.89-1/4 a bushel.

Corn Cv1 slid 0.4 percent to $4.29-3/4, having gained 0.8 percent in the previous session and wheat Wv1 dropped 0.1 $5.18-3/4 a bushel, having closed up 2.1 percent on Wednesday.

Forecasts for dry weather due to a La Nina weather pattern across key U.S. soybean growing regions have been supporting prices.

Grain markets are experiencing one of the steepest U.S. planting-season rallies on record, propelled by acute demand, crop weather concerns, currency gyrations and speculative buying.

The U.S. Department of Agriculture (USDA) has announced spot soybean sales for three days in a row, highlighting the problems that excessive rains have wreaked on the harvest in Argentina.

The USDA said early on Wednesday that exporters booked deals to ship another 132,000 tonnes of soybeans to China during the 2015-16 crop year. China is the top buyer of the oilseed.

Funds have been actively buying agricultural commodities, fuelling the rally in prices, and were net buyers of CBOT soybean, corn and wheat contracts on Wednesday.

Analysts estimated that funds bought a net 20,000 soybean contracts, 8,000 to 15,000 corn contracts and 6,000 to 8,000 wheat contracts.

In news that could provide further gains, Southern Russia, key for wheat exports via the Black Sea, may reap a record wheat crop but of lower quality compared to last year, Dmitry Rylko, the head of agriculture consultancy IKAR said on Wednesday.

Russia, a major global wheat exporter to North Africa and the Middle East, was hit by excessive rains at the end of last week which raised concerns among some analysts about the quality of its wheat crop.

Вероятность возникновения Ла-Нинья составляет всё еще 50%

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09.06.2016 | УКРАГРОКОНСАЛТ

Вероятность формирования погодного феномена Ла-Нинья в конце 2016 года составляет 50%, сообщило во вторник австралийское Бюро метеорологии (BOM), поскольку тропическая часть Тихого океана продолжает охлаждаться.

Бюро сообщило в мае, что самый сильный за последние почти 20 лет Эль-Ниньо, который нанес ущерб урожаям в Азии и вызвал нехватку продовольствия, закончился. Бюро определило вероятность формирования Ла-Нинья на уровне 50:50, который пока сохраняется.

Тропическая часть Тихого океана находится в нейтральном состоянии Южной осцилляции (ENSO), что говорит об отсутствии и Эль-Ниньо, и Ла-Нинья, заявило бюро во вторник.

Международные климатические модели указывают, что тропическая часть Тихого океана будет продолжать охлаждаться, шесть из восьми моделей предполагает, что Ла-Нинья может сформироваться в июне-августе, сообщило бюро.

Недавно закончившийся Эль-Ниньо привел к повышению морских температур до высших уровней за последние 19 лет, вызвав более засушливую погоду и приведя к падению производства пальмового масла и риса в Азии.

Фермеры теперь ожидают формирования климатической модели Ла-Нинья, которая обычно приносит более влажную погоду в Азии.

Soybeans up for 3rd day on U.S. weather concerns, wheat eases – RTRS

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08-Jun-2016 06:02
  • Soybeans gain more ground on f’casts of dry U.S. summer
  • Wheat eases after 5-day rally on Europe rains, corn dips

By Naveen Thukral

SINGAPORE, June 8 (Reuters) – Chicago soybean futures rose for a third consecutive session on Wednesday, with prices underpinned by forecasts of hot and dry weather during the U.S. summer growing season.

Wheat eased as the market took a breather after a five-session rally which was triggered as unseasonal rains in Europe sparked concerns over potential crop losses.

The Chicago Board of Trade most-active soybean contract  Sv1 had risen 0.4 percent to $11.46-1/4 a bushel by 0237 GMT, having closed 0.3-percent higher on Tuesday.

Wheat  Wv1 slid 0.3 percent to $5.07-1/4 a bushel after gaining almost 10 percent in the last five sessions, while corn  Cv1 fell 0.2 percent to $4.27 a bushel.

“Investors and traders are worried about dryness in U.S. soybeans’ establishment and development stages,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

Midwest Market Solutions said weather forecasts for July for key U.S. soybean growing regions call for hotter and direr conditions than normal, stirring fears that a La Nina weather pattern could be emerging.

Soybeans have climbed about 34 percent since the beginning of March as unseasonal rains caused widespread damage to the crop in Argentina, the world’s third largest supplier.

The U.S. Department of Agriculture’s announcement that private exporters sold 180,000 tonnes of soybeans to China for 2016/17 delivery supported prices. That marked the second day in a row that the government had announced a sale of U.S. supplies.

Torrential rain in France could cut wheat yields in the European Union’s biggest grower although better conditions in countries including Germany are keeping western Europe on course for another large harvest this year.

U.S. winter wheat ratings fell by one point to 62 percent, but the relatively good score and drier weather for the U.S. harvest under way have underlined ample U.S. supplies.

Commodity funds were net buyers of CBOT soybean, corn and wheat futures contracts on Tuesday.

Traders estimated that funds activity in corn ranged from net even to buyers of 7,000 contracts. In soybeans, they were estimated to be net buyers of 3,000 to 5,000 contracts. For wheat, estimates ranged from net purchases of 5,000 to 7,000 contracts.

Early harvested corn pushes down record Brazilian prices

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SAO PAULO, June 6 (Reuters) – Early harvested corn hitting Brazil’s grain markets is lowering record high prices, which have hurt the country’s massive poultry and pork industries, specialists said on Monday.

Despite the small size of the lots coming early from the fields of Mato Grosso and Parana, Brazil’s biggest producer states of the grain, their arrival has driven down the stratospheric prices seen over the past months in the near absence of the main animal feeds ingredient on the spot market.

A few weeks ago, corn was quoted, though hardly sold, at 50 reais ($14.33) a 60-kg bag in Mato Grosso. Prices have already dropped to between 32 reais and 40 reais.

“The price is becoming real again … The liquidity has come back … These absurd values of the past months were only possible because of the lack of liquidity,” said Daniel Latorraca, the superintendent of Mato Grosso’s Farm Economics Institute.

He added that supplies of early arrivals of corn would not increase much in the next week, as harvest was still sporadic and nascent. But harvest is expected to pick up by the end of June.

Farmers most likely sped up some early harvesting of fields that were ready to capture some of the record high prices on the physical market.

Even at between 32 reais and 40 reais, corn prices are still two to three times what they were last year at this time, and the country’s meat industry is downsizing to limit losses stemming from high feed costs. (Full Story)

By the end of last week, farmers had harvested 3 percent of Mato Grosso’s corn crop.

“It’s very little corn yet, but it gives an indication, and people realize there is physical corn again and turn off the speculative element,” said Ricardo Santin, vice president of Brazil’s Animal Protein Association.

He said some producers in Sao Paulo were buying corn at 30 reais a bag in Mato Grosso and bringing it back to the state for a total cost of 40 reais per bag when freight costs were added, which is still better than the 50 reais per bag last week.

Santin said the corn harvest in Parana, Brazil’s No. 2 producer state of the grain, would also pick up by the end of June. He also said that the corn crop from Paraguay would be coming online in the next weeks.

“The peak of speculation is over. Time will only work against the guy that was holding corn,” Santin said.

The Brazilian farming prices research center Cepea ESQ/CORN/ANALYSP said that sellers of corn were appearing on the spot market in greater number to capture attractive prices in the past week.

By the end of June 2015, only 10 percent of the country’s winter corn crop had been harvested.

Edmar Gervasio, a corn specialist at Parana state’s agriculture secretariat, said the harvest will pick up speed at the end of June in the state, but he dismissed expectations that prices would fully recover to normal levels soon.

Prices for corn began to reach record levels in April when drought started to hurt Mato Grosso’s winter corn crop, which would have not been so bad had it not been for record exports of the grain over the previous year because of the sharp drop in the local currency.

“I don’t see a lot of space (to a return to normal prices) because we are talking about Brazil as a whole, which has suffered a loss in production of corn (due to drought),” Gervasio said.

Soybeans rally on Argentina’s crop woes, wheat hits 6-week top – RTRS

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  • Soybeans jump 1.3 pct on concerns over LatAm crops
  • Corn rises for 4th day, wheat hits six-week high

By Naveen Thukral

SINGAPORE, June 6 (Reuters) – U.S. soybeans gained 1.3 percent on Monday, rising in three out of the last four sessions, with prices underpinned by declining supplies from key supplier Argentina.

Corn rose for a fourth consecutive session on tightening supplies in Brazil, while wheat climbed to a six-week high as heavy rains threatened crop prospects in western Europe.

The Chicago Board of Trade most-active soybeans  Sv1 contract climbed 1.3 percent to $11.46-1/2 a bushel by 0254 GMT and corn  Cv1 added 0.7 percent to $4.21 a bushel. Wheat  Wv1 rose as much as 1 percent to $5.02 a bushel, highest since April

21.

“Solid U.S. export sales are lending support to ideas that, as South American basis firms, importers are switching over to more U.S. beans,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

“The greenback’s dive on Friday provides an added boost to U.S. competitiveness.”

Renewed rains in Argentina have heightened concerns about crop losses in the world’s third-largest producer. Exports of soybeans and products such as soymeal from the country may decline sharply after rains in April caused widespread damage to the crop.

Additional support for beans stemmed from a U.S. Agriculture Department report that showed strong demand for new-crop supplies that will be delivered in the fall.

Brazil, the world’s second largest corn exporter, continues to face tight supplies.

Record-high corn prices in the country are compelling pork producers to slaughter sows they cannot afford to feed and poultry processors to close plants.

Southern states that are the traditional home to pork and poultry plants have been hardest hit by soaring corn feed prices and a plunge in demand for meat, with companies closing at least three slaughter houses to cut supply, said Francisco Turra, president of Brazil’s Animal Protein Association.

The condition of cereal crops in France worsened again last week, farm office FranceAgriMer said on Friday, in a sign that heavy rain is affecting crops in the European Union’s largest grain producer.

Forecast heavy rains over Australia’s east coast next week are expected to boost wheat production above official estimates in the world’s fourth-largest exporter, analysts said on Friday.

Large speculators raised their net-long position in Chicago Board of Trade corn futures in the week to May. 31, regulatory data released on Friday showed.

The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, increased their net-short position in CBOT wheat and raised their net-long position in soybeans.

Record Brazil corn prices shrink poultry, hog producers

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  • Pork and poultry industry slashes capacity 15 pct -ABPA
  • Industry’s recent expansion runs into corn shortage, demand drop
  • Brazil’s No. 3 processor Aurora to cut capacity 8-16 pct
  • Brazil economy in worst downturn since 1930

By Reese Ewing

SAO PAULO, June 3 (Reuters) – Stubbornly record-high corn prices in Brazil, the world’s No. 2 exporter of the grain, are compelling pork producers to slaughter sows they cannot afford to feed and poultry processors to close plants.

Southern states that are the traditional home to pork and poultry plants have been hardest hit by soaring corn feed prices and a plunge in demand for meat, with companies closing at least three slaughter houses to cut supply, said Francisco Turra, president of Brazil’s Animal Protein Association (ABPA).

As much as 15 percent of pork and poultry processing capacity has shut in the world’s top poultry exporter and fourth-largest pork exporter, he estimated. That is equal to 225,000 tonnes of monthly meat production.

Pain across the massive meat industry, which is laying off workers and losing money, will deepen the stricken government’s woes as the economy suffers its worst downturn since 1930.

“The price of drumsticks in the supermarket is 5 reais ($1.40) a kilogram: that barely pays for water to produce the meat,” Mario Lanznaster, president of Brazil’s No. 3 pork and poultry processor Aurora Alimentos, said on Wednesday, estimating that minimum production costs were 50 percent higher.

The company will reduce output by 8 percent by furloughing one shift by August at its Abelardo Luz plant in Santa Catarina and will shut the entire unit’s operations in September if conditions do not improve.

The world’s top beef exporter JBS SA JBSS3.SA and the biggest poultry exporter BRF SA BRFS3.SA have raised local prices for the second time this year to try to offset rising feed costs. But this is only weakening demand in the severe recession.

Brazil produces 1.2 million tonnes of chicken meat a month, most of which is consumed at home. It slaughters 3 million pigs a month, less than half of which are exported.

BLEEDING CASH

Brazil’s hog and chicken processors have been bleeding cash for months as an unexpected domestic shortage in corn pushed local prices to record highs. As the real BRL= collapsed against the dollar last year, merchants and exporters sold record amounts of the grain abroad, leaving local industry facing stratospheric prices for feed. (Full Story)

In April, the government eased restrictions on corn imports to help meet domestic demand, but prices MAZ-PIDX-BRL remain above 53 reais ($14.70) a bag, even as the global market surplus swells and international prices are under pressure.

The pain for the industry is becoming more acute as they struggle to pass on the extra costs to consumers.

Some pork producers in Mato Grosso in center-west Brazil are culling their reproductive sows, said Alexandre Possebon, the state deputy farm secretary.

At around 315 reais a carcass, they are losing 10-20 reais ($2.8 – $5.6) per animal they raise to maturity, he said.

The national pork producers’ association in Brasilia said farmers were reducing insemination of pigs by 10 to 15 percent.

While cutting hog breeding rates and culling sows is typical during downturns in demand, this is turning out to be the most severe contraction for Brazil’s livestock industry since the world economic crisis in 2008.

The steps are intended to tighten local meat supplies and boost retail prices, which may slow the central bank’s hopes to lower interest rates later in the year. Pork production costs are at record highs. Feed, made up mostly of corn, accounts for roughly 70 percent of production costs.

COSTLY CORN

Averama Alimentos, which slaughters 280,000 birds a day at its two plants, said record-high prices for the grain forced it to close its larger operation in Umuarama in southern Brazil with the loss of 1,500 jobs.

Banks had already withdrawn credit lines last year amid the political crisis and recession that deflated domestic demand.

Companies, as well as farmers, are now counting on relief when the second of two annual corn crops arrives in the coming weeks. But dry weather has hurt yields, raising concerns that feed costs could remain high until early 2017.

“It’s going to take a while for prices to come down,” said Fernando Iglesias, meats specialist at analysts Safras e Mercado. ($1 = 3.60 reais)

SocGen upbeat on prospects for soybean, hard wheat futures

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Soybean and hard wheat futures look undervalued – but not for contracts this side of 2017, Societe Generale said, forecasting that investors may have already overegged short-term price prospects.

While the bank raises its price forecasts for most major grain contracts, by up to $2.84 a bushel for soybean futures, its outlooks for the rest of 2016 remained below those that investors are factoring in.

For corn, the bank forecast Chicago futures averaging $3.94 a bushel in the last three months of this year, below the price of $4.16 ¼ a bushel being factored in on Thursday by the December contract.

“US corn farmers are well on their way to finish planting another large corn crop,” SocGen analyst Rajesh Singla said, saying that the grain “remained more profitable” for farmers than rival soybeans during the key January-April period for making sowings decisions.

The bank also raised doubts on the demand side, of US corn exports rising by 175m bushels to 1.90bn bushels in 2016-17, as forecast by the US Department of Agriculture.

“With the sharp increase in corn exports from Argentina and expectations of a recovery in production in the EU, South Africa and Asia in 2016-17, US corn exports likely will face tough competition,” Mr Singla said.

‘Market may remain tight’

However, SocGen was more upbeat on prospects for soybean prices heading into next year, despite pitching prices for the rest of 2016 below the futures curve, seeing Chicago futures average $10.59 a bushel in the last three months of this year.

November futures were on Thursday trading at $10.71 ½ a bushel.

Soybean prices will jump to average $11.09 a bushel in the first three months of 2017 – well ahead of the $10.43 a bushel being priced in by March futures.

The bank cited a tightening to soybean supplies both from demand from China, where raised income and pork prices “should continue to support higher soybean imports”, and in production terms from South America.

“Brazil and Argentina, two key soybean exporters are showing signs of peaking soybean yields.

“We believe that with slowing acreage growth and peaking soybean yields, the soybean market may remain tight in the future.”

Farmer losses

And for wheat, it also saw some prospect for price gains in early 2017 beyond those investors are already pricing in – at least for Kansas City hard red winter wheat, which it forecast averaging $5.24 a bushel in the January-to-March period.

March 2017 futures were on Thursday trading at $5.13 ½ a bushel.

SocGen cautioned of a further drop in US sowings ahead, from levels which are already historically low, given that prices are “significantly below the cost of production”.

In fact, US wheat farmers on average face a loss of $120 an acre on wheat, once fixed costs are factored in, compared with a $51-an-acre profit on soybeans, the bank said.

Key spreads

The continued drop in wheat sowings should benefit in particular prices of hard red winter wheat, the biggest class in the US harvest, which should regain parity with Chicago soft red winter wheat “by the end of year”, and renew its typical premium early in 2017.

Kansas City wheat, currently trading at a discount of nearly 4% to its Chicago peer, July basis, typically trades at a premium of about 8%, earned by its higher protein content.

SocGen also flagged that the relatively weak wheat prices had cut their premium over corn to some 15% in Chicago, compared with a long-term average of 37%.

“This may increase wheat’s competitiveness versus corn for feed usage.”

Soybeans hit near 2-year high, corn at 10-month top on supply woes

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  • Soybeans up for 2nd day, hit highest in 22 months
  • Corn climbs to a 10 month peak, wheat firms
  • Lower supplies from South America driving prices higher

Adds details, quotes

By Naveen Thukral

SINGAPORE, June 2 (Reuters) – U.S. soybean futures rose to their highest in almost two years on Thursday, while corn climbed to a 10-month peak with prices in agricultural markets underpinned by lower supplies.

Wheat rose amid concerns over rains on the U.S. Plains which threaten the hard red winter wheat crop which is getting ready for harvest.

Chicago Board of Trade most-active soybean contract Sv1 climbed 0.6 percent to $11.06-3/4 a bushel by 0326 GMT. Earlier in the session, the market touched its highest since July 2014 at $11.09-3/4 a bushel.

Corn Cv1 gained 0.1 percent to $4.14-1/4 a bushel after hitting its highest since July at $4.15 a bushel and wheat Wv1 rose 0.5 percent to $4.76 a bushel, having closed up 2 percent on Wednesday.

Concerns over South American production have supported corn and soybean prices.

“There is a bullish trend as we are expecting strong demand for U.S. products, both soybeans and corn,” said Kaname Gokon at brokerage Okato Shoji in Tokyo.

“Chinese pork prices are at record high, so they will need more corn and soybeans to boost pork production.”

Brazil’s cereals exporters association Anec cut its estimate for 2016 corn exports to 23 million tonnes, down 7 million tonnes from its April outlook. It also said soybean exports in May fell to 8.69 million tonnes from a record 10.3 million tonnes in April.

Argentina has seen rains ahead of harvest in April cause widespread damage to the soybean crop.

Additional support stemmed from China’s strong demand for soybeans, which are crushed to make soymeal, a protein rich animal feed ingredient, and cooking oil.

Pork prices in China are climbing at a blistering pace despite government moves to cool markets in the world’s top consumer of the meat by selling chunks of its frozen reserves.

Government data released on Wednesday showed Chinese pork prices hit record levels this week, driven up as farmers hold back pigs from slaughter to rebuild herds following widespread culling in 2014 when prices were low.

Wheat has been buoyed by forecasts for rains across the southern U.S. Plains, which threatens production in the region.

Commodity funds were net buyers of CBOT corn, soybean and wheat contracts on Wednesday. Trader estimates of net fund purchases in corn ranged from 13,000 to 15,000 contracts and 9,000 to 15,000 contracts in soybeans. Estimates of fund buying in wheat ranged from 3,500 to 4,000 contracts.

Soybeans, corn fall for 2nd day on US crop progress; wheat up

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  • Soybeans fall for 2nd day on rapid U.S. planting progress
  • Corn eases with no delay to U.S. planting despite rains

Adds comment, detail

By Naveen Thukral

SINGAPORE, June 1 (Reuters) – Chicago soybean and corn futures slid for a second session on Wednesday as both markets came under pressure from rapidly progressing planting across the U.S. Midwest.

Wheat edged higher following deep losses which were triggered by forecasts of improved harvest conditions for the U.S. hard red winter wheat crop.

The Chicago Board of Trade most-active soybean contract Sv1 had fallen 0.6 percent to $10.72-1/2 a bushel by 0303 GMT, having closed down 0.7 percent on Tuesday. Corn Cv1 dropped 0.3 percent to $4.03-1/2 a bushel after closing the last session down 1.9 percent.

Wheat Wv1 advanced 0.2 percent to $4.65-1/4 a bushel, having dropped 3.5 percent on Tuesday. Earlier in the session it hit a low of $4.63 a bushel, its weakest since May 25.

The U.S. Department of Agriculture pegged the condition of corn at 72 percent good to excellent, slightly ahead of market expectations.

U.S. farmers had finished planting 94 percent of the crop as of Sunday as compared with 86 percent last week, the agency said after the market closed on Tuesday.

Soybean plantings were 73 percent complete, the USDA said, sharply higher than 56 a week ago and above the average pace of 66 percent.

“While rain over the holiday weekend may have been a nuisance for fieldwork it does not appear to have slowed U.S. planting progress by all that much,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

U.S. farmers have sold nearly double the usual amount of new-crop soybeans this spring, taking advantage of a 14-percent rally in the futures market to lock in profits on a crop that most have not even finished planting yet.

The sales could depress soybean basis bids – the difference between the futures market and the cash price – at grain terminals around the U.S. Midwest during harvest.

Wheat was under pressure on Tuesday as weather forecasts call for improving U.S. harvest conditions for the winter crop.

The USDA said condition of winter wheat crop 63 percent good to excellent, ahead of analysts’ forecasts.

Spring wheat was pegged at 79 percent good to excellent, ahead of forecasts for 76 percent good to excellent.

Commodity funds were net sellers of CBOT corn, soybean and wheat contracts on Tuesday.

Trader estimates of net fund sales in corn ranged from 8,000 to 13,000 contracts and 5,000 to 10,000 in soybeans. Estimates of fund selling in wheat ranged from 6,000 to 12,000 contracts.

Rabobank bearish on soybeans, corn after supply-risk price surge

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SINGAPORE, May 30 (Reuters) – Soybean and corn traders have priced in risks from the impact of adverse weather on output in South America, and markets for the two could now face downward pressures, the chief executive of Rabobank Singapore said on Monday.

Unseasonal rains in Argentina’s key producing regions ahead of the bean harvest in March and April sparked a rally in soybeans and soymeal on worries about crop yields.

Over the same period, strong exports and dryness in Brazil turned that Latin American country – usually the world’s second largest corn exporter – into a buyer.

“Soybean prices as well as corn prices have factored in these latest developments, dryness in Brazil and flooding in Argentina,” Marcel van Doremaele, head of the bank’s Singapore operations, told Reuters.

“We are slightly bearish on a lot of these grains right now and feel that the markets are a bit overdone.”

The Rabobank group specializes in commodities with a focus on food and agriculture.

Soybeans Sv1 jumped 22 percent from April lows to $10.98 a bushel, while soymeal SMv1 gained almost 60 percent to $419.80 a short ton.

Chicago corn Cv1 rose to its highest in 10 months on strong export demand and short-covering last week.

Flooding in Argentina has cut into the country’s expected soybean output by 4 million to 8 million tonnes, even as higher-than-expected yields in dryer areas offset some of the losses.

Argentina could export up to 25 percent fewer soybeans this year than last, analysts say, after severe rains left many fields underwater, damaging oilseed quality.

The country is the world’s biggest exporter of animal feed ingredient soymeal and third-largest supplier of soybeans.

“We think that the world still has enough supply but from a situation where two months ago everybody thought it is very plentiful, we are now in a situation where a lot of these markets are balanced,” van Doremaele said.

One reason for the price surge over the last month was that the damage to Argentina’s soybean crop came amid strong demand from China.

China’s soybean imports surged 33 percent in April from a year ago, setting a monthly record, amid strong demand for soymeal and soyoil.

Funds have been actively boosting their long positions in soybeans.

“We have seen a lot of fund investments in these areas which turned their position from a net short into a net long position,” van Doremaele official said.