By P.J. Huffstutter
CHICAGO, Jan 28 (Reuters) – Chicago soybean futures surged higher on Friday, reaching highs not seen since last summer, as the market anticipated drought losses in South America that could curb global export supplies.
Wheat rose after a two-day slide, attracting bargain-buying and traders hunting for short-covering, as investors closely monitor a standoff between Russia and the West over Ukraine that has fuelled fears of disruption to Black Sea grain shipments.
And corn futures gained with the rally in beans and wheat, with corn reaching more than a seven-month high in midday trading. Corn also saw support from strength in the crude oil markets.
The most-active soybean futures Sv1 on the Chicago Board Of Trade (CBOT) were up 1.36% at $14.68 per bushel by 11:38 a.m. EST (1638 GMT), after earlier reaching $14.79 per bushel, the highest price since June 15.
CBOT corn Cv1 was 0.68% higher at $6.29-1/2 a bushel, while CBOT wheat Wv1 was up 1.35% at $7.87-1/2 per bushel.
While rainfall in Argentina since mid-January has eased drought, analysts expected yields to have already been reduced for soy and corn crops in much of Argentina and also southern Brazil.
Lower forecasts for South American crops have raised expectations of increased U.S. exports, tempering concerns about a lull in Chinese demand in recent months.
Private exporters reported sales of 264,000 tonnes of soybeans to China, 141,514 tonnes of soybeans to Mexico, and 251,500 tonnes of soybeans to unknown destinations, the U.S. Agriculture Department said.
Weather conditions in the United States are also starting to be more of a factor in the market, as farmers begin to approach the spring planting season, said Karl Setzer, commodity risk analyst at AgriVisor.
“We are starting to see more interest on long-range models and what impact they may have on seeding and potential acres,” Setzer said in an analyst note.
Soyoil contracts also soared, after Malaysian palm oil futures hit a new all-time high as top producer Indonesia limited exports.
And record prices for palm oil, which competes with soybean byproduct soyoil, and a rally in crude oil have also lent support to soybeans this week. POI/O/R
(Additional reporting by Gus Trompiz in Paris, Gavin Maguire in Singapore and Mark Weinraub in Chicago; Editing by Sherry Jacob-Phillips, Subhranshu Sahu, David Evans and Paul Simao)
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