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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.

Soybeans hit 2-week high on Argentina supply woes, wheat rises

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  • Soybeans mark 2-week top, soymeal at 18-month peak
  • Argentina crop concerns lift prices, speculators long in meal
  • Wheat gains for third day as rain forecast in U.S.

By Naveen Thukral

SINGAPORE, May 26 (Reuters) – U.S. soybeans hit their highest in two weeks on Thursday and soymeal jumped to an 18-month peak, with prices underpinned by concerns over lower supplies from key exporter Argentina.

Wheat gained more ground as the market was supported by unseasonal rains causing potential damage to the maturing U.S. winter wheat crop, while corn traded at its highest in more than a month.

The Chicago Board of Trade most-active soybean contract Sv1 rose as much as 0.3 percent to $10.88-1/4 a bushel, its highest since May 12. Soybeans, which rallied almost 3 percent in the last session, were trading down 0.1 percent by 0241 GMT.

Soymeal SMv1 added as much as 0.9 percent to $410.9 a short ton, the strongest since November 2016. The market climbed 4.7 percent in the last session.

“The main concern driving soybean and meal prices higher is the damage to crops in Argentina, but speculative length has increased significantly in recent months,” said Pawan Kumar, a director of agricultural commodities research at Rabobank in Singapore.

“Non commercials continue to extend their net long position across CBOT soymeal, reaching a 9-month high. We expect the U.S. soybean crop to be larger than (had been) expected and as a result meal futures will retreat.”

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

Trader estimates of net fund buying in soybeans ranged from 10,000 to 16,000 contracts. Estimates of net fund buying in corn were from 8,000 to 16,000 contracts and in soymeal from 7,000 to 10,000 contracts.

In April, there was flooding in key farm areas in Argentina, the world’s third-largest exporter of unprocessed soybeans and its biggest shipper of soymeal.

Flooding is expected to have cut the country’s soybean output by 4 million to 8 million tonnes, even as higher-than-expected yields in dryer areas offset some of the losses, local farm analysts said on Wednesday.

The country’s soybean exports could fall by as much as 25 percent this year.

Wheat is drawing support on concerns over forecasts of rains in the U.S. Plains which could damage the hard red winter wheat crop.

Wheat Wv1 rose 0.2 percent to $4.67 a bushel, while corn Cv1 slid 0.1 percent to $4.04-1/4 a bushel. Corn climbed earlier in the session to $4.05 a bushel, matching Wednesday’s price which was the highest since April 21.

‘About 80%’ of Ukraine soy grown – illegally – from GM seed

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by agrimoney.com

About 80% of Ukraine’s soybeans, and 10% of corn, are grown – illegally – from genetically modified seed, US officials said, attributing improved seed quality in part for expectations for strong harvests this year.

The US Department of Agriculture – expanding on an initial estimate two weeks ago that Ukraine will produce a record 5.0m tonnes of soybeans this year – said the forecast reflected in part expectations of yield matching an all-time high of 2.17 tonnes per hectare, supported by genetically engineered seed.

“Although the planting of genetically modified crops is officially prohibited, estimates from private commodity analysts suggest that about 80% of Ukraine’s soybeans are genetically modified,” the USDA said.

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GRAINS-Soybeans set for 6th week of gains, strong dollar caps rally

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  • 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.

GRAINS-Corn eases from one-month high; soy falls for second day on dollar gain

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  • Corn snaps five-session rally on stronger dollar
  • Dollar firm as Fed minutes keep June rate hike alive
  • Wheat pressured by outlook for higher Black Sea output
  • Argentina’s soybean exports seen down 25 pct

Adds details, quotes

By Naveen Thukral

SINGAPORE, May 19 (Reuters) – Chicago corn futures slid on Thursday as a stronger dollar prompted investors to take profits after prices climbed to a near one-month peak in the last session.

The dollar stood tall in Asian trading, after racing to multi-week highs when the minutes of the U.S. Federal Reserve’s latest policy meeting rekindled expectations for a June interest rate hike. USD/

“The dollar strength is bearish for corn, wheat and soybeans,” said Kaname Gokon at brokerage Okato Shoji in Tokyo.

“But we have corn planting delays due to cool and wet weather in the Midwest which will prevent any deep decline in prices.”

The most-active corn contract on the Chicago Board Of Trade Cv1 fell 0.7 percent to $3.96-3/4 a bushel by 0241 GMT. Corn hit a near one-month high of $4.00-1/2 a bushel in the last session, the most since April 21.

Wheat Wv1 lost 0.3 percent to $4.78-1/2 a bushel and soybeans Sv1 gave up 0.7 percent to $10.67-1/4 a bushel.

A stronger U.S. dollar makes commodities, traded on a dollar basis, more expensive for importers holding other currencies.

The corn market on Wednesday received support from a proposal for higher ethanol blending in the United States.

U.S. regulators proposed a modest increase in the amount of corn-based ethanol and biofuels that fuel producers must mix into diesel and gasoline in 2017.

The Environmental Protection Agency called for 18.8 billion gallons to be blended into the nation’s fuel supply in 2017, up 4 percent from the 18.11 billion gallons set for this year.

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

In April, floods inundated key farm areas of Argentina, the world’s third-biggest exporter of raw soybeans, prompting the U.S. Department of Agriculture to slash its forecast for soybean output to 56.5 million tonnes this year.

There is additional pressure on wheat stemming from expectations of higher yields in the Black Sea region.

Warm and wet spring weather in leading Black Sea grain producers Russia and Ukraine, has paved the way for a large wheat harvest this year, analysts and traders said on Tuesday.