January 3, 2017 / 3:54 AM / 7 months ago

GRAINS-Soybeans start New Year on positive note, Chinese demand supports

4 Min Read

* Chicago soybeans gain 0.4 pct, snap two sessions of
decline
    * Expectations of strong Chinese demand underpin soybean
futures
    * Corn gains for third sessions, wheat unmoved after 2-day
rise

 (Adds details, quotes)
    By Naveen Thukral
    SINGAPORE, Jan 3 (Reuters) - Chicago soybeans started 2017
trading on Tuesday by edging higher, snapping two sessions of
decline on expectations of strong Chinese demand although ample
world supplies kept a lid on the market.
    Corn rose for a third consecutive session while wheat was
little changed following two days of gains.
    The most-active soybean contract on the Chicago Board Of
Trade climbed 0.3 percent to $10.06-1/2 a bushel by 0330
GMT, corn advanced 0.5 percent to $3.53-3/4 a bushel and
wheat was little changed at $4.08-1/4 a bushel.
    "China is a big story in terms of demand for soybeans, we
saw strong demand last year and it is expected to grow in 2017,"
said Phin Ziebell, agribusiness economist, National Australia
Bank.
    "But it is fair to say Brazil's output is expected to be a
record, so South American crop is looking really good.
Fundamentals are not supporting prices as inventories are so
high."
    Brazil is expected to produce 102 million tonnes of soybeans
in 2016/17, up from 96.5 million tonnes a year ago, according to
U.S. Department of Agriculture estimates. 
    At the same time, China, which purchases 60 percent of the
soybeans traded in the world, is forecast to import 86 million
tonnes in 2016/17 as compared with 83.2 million tonnes in the
previous year.
    Argentina will cut its soybean export tax by 12 percentage
points to 18 percent by 2020, the government said on Monday, a
move expected to spur more planting in the South American grains
powerhouse at a time of rising world food demand. 
    The USDA reported export sales of old-crop wheat in the
latest week at 568,000 tonnes, above a range of trade
expectations for 200,000-500,000 tonnes. 
    Wheat prices also drew some support in the last session on
fears over potential crop damage due to cold weather forecast
for the coming weeks.
    Large speculators increased their net short position in CBOT
corn futures in the week to Dec. 27, 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, trimmed their net
short position in CBOT wheat and cut their net long position in
soybeans. 
    
 Grains prices at  0330 GMT
 Contract    Last     Change  Pct chg  Two-day chg  MA 30    RSI
 CBOT wheat  408.25   0.25    +0.06%   +0.86%       410.18   57
 CBOT corn   353.75   1.75    +0.50%   +1.14%       354.45   55
 CBOT soy    1006.50  2.50    +0.25%   -0.62%       1033.02  41
 CBOT rice   9.66     $0.05   +0.52%   +1.63%       $9.82    48
 WTI crude   54.02    $0.30   +0.56%   +0.46%       $50.88   69
 Currencies                                                  
 Euro/dlr    $1.048   $0.002  +0.19%   -0.34%                
 USD/AUD     0.7224   0.004   +0.60%   +0.12%                
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 hundredweight
 RSI 14, exponential
         

 (Reporting by Naveen Thukral; Editing by Gopakumar Warrier)

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