February 20, 2018 / 2:35 AM / 3 months ago

GRAINS-Soybeans climb to seven-month top on Argentina dryness

    * Soybeans rebound, rise for five out six sessions
    * Lack of rains over the weekend support prices
    * Record Brazilian crop to offset supply shortfall

 (Adds details, quotes)
    By Naveen Thukral
    SINGAPORE, Feb 20 (Reuters) - Chicago soybean futures rose
to a seven-month high on Tuesday with the market climbing for
five out of six sessions, buoyed by poor rains over the weekend
in Argentina's drought-hit oilseed growing areas. 
    Wheat rose around half a percent, recouping some of last
session's losse, while corn edged higher.
    The most-active soybean contract on the Chicago Board Of
Trade added 0.9 percent to $10.30-3/4 a bushel by 0207
GMT, near the session high of $10.33-1/2 a bushel - the highest
since July 25. 
    Wheat gained 0.5 percent to $4.60 a bushel, having
closed down 0.9 percent on Friday, and corn rose 0.1
percent to $3.68 a bushel.
    The drought afflicting Argentina since November has
shrivelled soybean yields to the point that analysts and farmers
have slashed harvest estimates by about 10 million tonnes, with
final crop forecasts consolidating under the 50 million tonne
    Weekend rains, which were expected to bring relief, were not
sufficient for a recovery in yields.
    "Argentina's soybean regions partially received some rain
over the weekend. The amounts though were both modest and, more
importantly, unsurprising," said Tobin Gorey, director of
agricultural strategy at the Commonwealth Bank of Australia.
    "Weather forecasters expect modest rains this week. The
total rainfall though cannot do any more than arrest the decline
in yields."
    An all-time high crop in Brazil is expected to compensate
for yield losses in Argentina.
    Brazil's 2017/18 soybean crop is expected to reach a record
115.6 million tonnes, 1.2 percent above the previous record last
year of 114.2 million tonnes, consultancy Safras & Mercado said
on Monday.
    The consultancy expects Brazil to produce 89.46 million
tonnes of corn this season, 17 percent less than last year, as
planted area falls 11 percent and yields are projected to come
down as well.
    In the wheat market, Russian wheat prices rose sharply last
week, supported by higher global prices and helped by strong
demand for Black Sea wheat in Asia, analysts said on Monday.

    Large speculators switched to a net long position in CBOT
corn futures in the week to Feb. 13, regulatory data released on
Friday showed. 
    The Commodity Futures Trading Commission's weekly
commitments of traders report also showed that noncommercial
traders, a category that includes hedge funds, trimmed their net
short position in CBOT wheat and switched to a net long position
in soybeans.
 Grains prices at  0207 GMT
 Contract    Last     Change   Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  460.00   2.25     +0.49%   +0.93%       441.03  56
 CBOT corn   368.00   0.50     +0.14%   +0.20%       357.51  69
 CBOT soy    1030.75  9.25     +0.91%   +1.33%       984.70  77
 CBOT rice   12.02    $0.00    +0.04%   -1.88%       $12.20  33
 WTI crude   62.16    $0.48    +0.78%   +1.34%       $63.22  54
 Euro/dlr    $1.239   -$0.001  -0.11%   -0.92%               
 USD/AUD     0.7898   -0.001   -0.15%   -0.57%               
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 RSI 14, exponential

 (Reporting by Naveen Thukral; editing by Richard Pullin)
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