Soybean futures advanced in Chicago on indications of rising demand from makers of animal feed and international buyers after the price of oilseed and grains dropped to the lowest level this week since 2010.
Soybean futures have declined 15% in the past one year, and corn plunged in the wake of expectations for a bountiful harvest to bolster inventories. The US Department of Agriculture today said 120,000 metric tons of soybeans had been sold to China and 240,000 tons to undisclosed markets.
“We can see the commercial side stepping into the market. Demand for soybeans is coming from those who actually need the cash supplies,” Darin Newsom of DTN Inc of Omaha, Nebraska told Bloomberg in a telephone interview.
Soybean futures settlement in November added 1% to $10.97 per bushel as of 10:42 on the Chicago Board of Trade. Futures dropped to $10.65 on July 11, the lowest price since October 2010.
The USDA said on July 11 that farmers expect to produce 3.8 billion bushels this year, in comparison with 3.289 billion last year and last harvest’s crop reserves will hit 140 million, up from 125 million forecast last month. Global stockpiles will hit a record 85.31 million tons.
But according to Reuters, gains in grains were minimal because favorable weather continued to boost prospects for US harvest. Recent tumble of corn and soybean prices have fueled export demand.
December-delivery corn futures advanced 1.2% to $3.865 per bushel. The commodity hit a four-year low yesterday, trading at $3.7825 per bushel. The grains relative strength index for the past 14 days, a measure of price momentum approached 20 yesterday, while wheat almost hit 28. To some analysts, levels below 30 are indicative of oversold commodities.
September-delivery futures increased 0.2% to trade at $5.39 per bushel. Contracts dropped to $5.2425 on July 14, the lowest price since July 2010.
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