US soybean futures surged on Tuesday, finding support on short-covering due to less US harvest, optimism over Chinese export sales, and uncertainty on the availability of South American supplies.
Chicago Board of Trade (CBOT) soybean futures for January settlement rose 28-1/4 cents to $14.47-3/4 per bushel, having hit $14.49, its highest level since September 23.
Meanwhile, CBOT wheat futures for the December settlement also climbed 20-1/4 cents to $9.02-1/2 per bushel, while corn futures for the same settlement period traded 6-1/4 cents higher to $6.97-3/4 per bushel.
CBOT wheat hit a two-week high on uncertainty about grain shipments from major exporter Ukraine.
Following Russia’s move to pull out from the Black Sea grain deal, industry sources said insurers have stopped offering new cargo insurance for Black Sea shipments through a safe corridor backed by the United Nations (UN).
Wheat futures recovered from early losses as traders assessed the uncertainty on grain exports from the Black Sea and concerns over Southern Hemisphere crops. Corn also followed the uptrend.
Moreover, the Argentinian government is expected to declare measures permitting wheat export delays after drought in the country slowed wheat crop development.
The dry weather has also delayed the newly seeded 2023 wheat crop in the US, with the USDA saying only 28% of the crop was in good to excellent condition. That was the lowest start for the crop in years.
Agricultural Uncertainty on Brazil Protest
Soybeans were up on chart-driven buying as the January contract soared past the trading range for this month.
Protesters in Brazil continued to keep the main road to Paranagua’s important grain export port inaccessible, as supporters of outgoing President Jair Bolsonaro blocked roads across the country after his defeat to Luiz Inácio Lula da Silva.
The blockages, which took place in all but two states, have led to significant disruption and weighed on food supply chains.
Meanwhile, the outlook for soy output remained robust in Brazil. A US-based commodity brokerage now expects the country’s soybean crop to reach 154.35 million tons this year and the next, slightly higher than its previous forecast of 153.8 million tons.
The US Department of Agriculture (USDA) stated that soy harvest in the country has eased, with 88% of the crop harvested as of October 30, while corn harvest was at 76%.
