Chicago soybean futures rose on Tuesday past $550 per tonwhile those of corn and wheat fell, after markets reacted to forecasts of a reduction of production in Argentina.
Soybean and corn production in Argentina will be lower than previously thought, 27 million and 37 million tons, respectively, because a devastating drought decimated fields, according to the US Department of Agriculture.
“In the case of Argentine soybeans, the cut has been larger than expected, but I think it is more in line with what the market thought,” said Craig Turner of Daniels Trading.
Argentina suffers a severe drought, while Brazil, its rival in the export of corn and soybeans, has more favorable conditions.
The most active Chicago Stock Exchange (CBOT) soybean contract rose 0.7% to $550.25 a tonne. Corn in Chicago was down 0.5% at $256.58, while wheat lost 1% to $247.47.
In the United States, operators have been dealing with uneven weather, with early spring planting held back by wet and cold conditions and some winter wheat crops affected by drought.
“I think we’re going to quickly go back to negotiating the climate of North and South America,” said Terry Reilly, an analyst at Futures International.
Uncertainty over Black Sea supplies – with Russia threatening on Friday to circumvent a UN-brokered grain deal allowing shipments from Ukraine – also propped up wheat markets.
The USDA slightly raised its corn and wheat export estimates from Ukraine on Tuesday.
“Every time Russia says something about the grain deal that is bullish for grain, there is a market opportunity to seize. But no matter what, they want to export that grain.”said Mark Gold of US consultancy Top Third Ag Marketing.
Source: Ambito
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