Strong export sales are driving up soybeans and wheat futures, according to analysts. Corn futures also are on the rise, despite slipping sales.
“Strong exports have really helped to support the bean market despite record crop output, and I think the same thing can be said for the corn market, which has rallied a good 40 cents form those August lows and has really been able to hold together,” says analyst Joe Vaclavik of Standard Grain. “I think a lot of this has to do with good demand."
New crops soybean exports rose 2% this week at 2.1 MMT, USDA reports.
“That’s another tremendous sale, and right in the middle of expectations,” Vaclavik says.
Meantime, soybeans were up 3.5 cents to $10.15 ¼, after breaking the $10 barrier Wednesday.
China’s continuing strong demand for soybeans is erasing concern about too much carryout in a record crop year, another analyst notes.
"Even with the best soybean crop we have seen in the U.S., it is obvious that the USDA's projected carryover of 395 million bushels may not be enough of a cushion in case there was a weather issue in South America or the next U.S. growing season,” says Ted Seifried, writing in his blog, The Ted Spread. “With export numbers like we saw last week, we could theoretically be cleaned out of any carryover in a matter of weeks if there was a reason for global end-users to need to buy more U.S. beans."
Wheat sales of 646,100 MT advanced 26% over last week, beating trade expectations of 400,000 to 600,000 MT. Although corn exports slid 21 percent to 799,300 MT, December corn went up 3.5 cents at $3.57 ½ in early trading Thursday.
Wheat futures also rose in early trading this morning. Chicago wheat was up 6 cents to $4.17 2/5, while Kansas City wheat increased 2 3/5 cents to $4.19 3/5.
“It really appears to me that we’re moving past the big crop story, and we’re going to start to focus more on demand,” Vacklavik says. “We’re going to focus on South American production and on 2017 acreage production potential here in the U.S."