Chicago soybean futures rose for a fourth consecutive session on Wednesday, with the market trading near its highest since late July on concerns over dry weather reducing yields in Argentina, the world’s third-largest supplier.
Wheat ticked lower as U.S. suppliers struggle to win business amid plentiful global supplies while corn edged up.
Soybeans for January delivery on the Chicago Board of Trade were up 0.3 percent at $10.11-1/2 a bushel by 0318 GMT.
That is just a tad off Tuesday’s peak of $10.15, which was the highest since July 28.
“The Australian meteorology bureau has confirmed that La Nina has arrived which means dry weather for parts of the United States and South America,” said one India-based commodity analyst at an international bank.
“The market is trying to build a weather premium but we feel it is bit too early to get worried about Argentina’s soybean crop.”
The tropical Pacific Ocean has reached La Nina temperature levels, although climate models suggest the weather event will be weak and short-lived, Australian weather officials said on Tuesday.
“Concerns that Argentina’s soybean output is genuinely in danger are premature as the crop is only half-planted and the crucial development period is still months away,” Karen Braun, a Thomson Reuters columnist wrote on Tuesday.
“But rainfall has not been materializing as forecast, and the dryness has caused a slowdown in plantings. There is also potential for a drought-inducing La Nina pattern to persist throughout most of the growing season.”
The uncertainty surrounding Argentine crop prospects fueled hopes that China, the world’s biggest soybean importer, might start booking more U.S. soy cargoes. Sales of U.S. soybeans in the 2017-18 marketing year that started Sept. 1 have lagged the pace set at the same time last year.
Private analytics firm Informa Economics cut its estimate of Brazil’s 2017/18 soybean and corn crops, trade sources said.
Informa put 2017/18 Brazil soybean production at 110 million tonnes, down 1 million from its previous estimate, and put 2017/18 all-corn production at 89 million tonnes, down 3 million from a previous forecast.
CBOT wheat fell 0.1 percent to $4.32-1/4 a bushel and corn added 0.1 percent to $3.54 per bushel.
Cheaper wheat supplies from the Black Sea region are giving stiff competition to U.S. exporters.
Egypt, the world’s largest wheat buyer, has 3.4 million tonnes of wheat reserves, enough for more than four-and-a-half months, the supply minister said.
Commodity funds were net buyers of CBOT soybean, soymeal, soyoil and corn futures contracts on Tuesday and net sellers of wheat futures, traders said.