U.S. soybean futures gained more ground on Tuesday, with the market set to rise for third consecutive month in May on support from lower South American production.
Corn was poised for a second month of gains as Brazil, typically the world’s second biggest exporter, faces a shortfall in supplies.
The most-active soybean contract on the Chicago Board of Trade is up 6 percent for the month, taking three-month gains to almost 27 percent.
Corn has gained more than 17 percent in two months, while wheat edged lower in May, weighed down by ample world supplies.
“We have seen supply shocks in Argentina. It will be really crucial to see how the U.S. crop shapes up and the market will be sensitive to any issues with the weather,” said Phin Ziebell, agribusiness economist at National Australia Bank.
“What impact will La Nina have on the U.S. soybean crop? That is the big questions on everyone’s mind.”
Strong demand for U.S. corn is buoying the market as Brazil is facing a supply shortage. The U.S. Department of Agriculture confirmed last week that private exporters sold 130,000 tonnes of U.S. corn to unknown destinations. The agency separately confirmed sales of 383,000 tonnes of U.S. corn.
Still, the chief executive of Rabobank Singapore said on Monday soybean and corn markets 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.
Large speculators raised their net long position in CBOT corn in the week to May. 24, 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, increased their net short position in CBOT wheat and cut their net long position in soybeans.
In news, China will auction 300,400 tonnes of soybeans from state reserves on June 1, according to an online statement posted by the national trade centre.