Investing.com - U.S. grain futures ended the week higher on Friday, with soybean futures rallying to more than a five-month high amid ongoing concerns over crop conditions in South America, while corn and wheat prices advanced on sustained export demand for U.S. supplies.
Agricultural commodity traders shrugged off a broadly stronger U.S. dollar on Friday, instead focusing on market fundamentals.
On the Chicago Mercantile Exchange, soybeans for May delivery settled at USD13.3188 a bushel by close of trade Friday, the highest since September 21. On the week, prices gained 3.43%, the third consecutive weekly advance and the biggest since mid-October.
Soybean prices extended their win streak to ten straight trading sessions on Friday, rallying almost 10% since the beginning of February, as traders focused on distressed crops in major South American soy growers and on indications demand from top consumer China will remain robust in the near-term.
Influential industry group Informa Economics lowered its forecast of Brazil's soybean crop for the 2011-12 marketing season to 68 million tonnes, down from a previous estimate of 70 million.
Informa also cut its estimate for Paraguay's crop by 2.4m tonnes to 4m tonnes and raised its Argentine soy crop estimate by 1 million tonnes to 47.5 million tonnes.
However markets shrugged off the Argentinean estimate, after the nation’s biggest grains exchange in Rosario last week trimmed its forecast for Argentine soy production by 5 million tonnes to 44.5 million tonnes. The number also remains below the official USDA forecast of 48 million tonnes.
South America is a major soybean exporter and competes with the U.S. for business on the global market. A downbeat crop outlook there could increase demand for U.S. supplies.
Meanwhile, prices continued to draw support from increased demand prospects from China. Two weeks ago, the Asian nation bought 2.92 million tonnes of the oilseed from U.S. farmers in what was the biggest one-day deal on record.
China imports 60% of soybeans shipped around the world, with the bulk of its purchases coming from the U.S. and Brazil, the world's top exporters.
Meanwhile, wheat for May delivery settled at USD6.7225 a bushel by close of trade on Friday, the highest since February 7. The contract added 4.33% on the week.
Wheat futures have gained in four of the past five trading sessions, as adverse weather conditions in the U.S. Great Plains sparked a wave of short-covering, or bets on falling prices, by hedge funds and large institutional investors.
Weather forecasts pointed to unseasonably warm and windy weather moving into the Southwest corner of the U.S. Plains hard red winter wheat region during the upcoming week.
Also supporting sentiment on the grain, the U.S. Department of Agriculture reported a sale of 120,000 tonnes of wheat to Iran on Friday, the first purchase of U.S. wheat by the Persian Gulf country in nearly three years.
Market participants were unable to confirm which U.S. grain company sold the wheat to Iran, whose nuclear ambitions are at the heart of U.S.-led sanctions against the country.
U.S. food exports, including grain, to Iran are approved under a humanitarian authorization by the Treasury Department to ensure necessary items reach the Iranian people.
Meanwhile, Russia's Agriculture Ministry said that it expects domestic wheat production in the 2012-13 marketing season to rise to 57 million tonnes from 56.2 million in the 2011-12 year. However, exports are seen falling to 20 million tonnes from 21 million.
Russia is a major wheat exporter, while the U.S. is the world’s third largest wheat producer and biggest shipper of the grain.
Elsewhere on the Chicago Board of Trade, corn futures for May delivery settled at USD6.5388 a bushel by close of trade on Friday, advancing 1.9% on the week.
While corn prices have underperformed wheat and soybeans in recent weeks, prices are expected to remain supported amid speculation of strong demand from China.
Prices were further supported by a strike of Argentine dock workers at the country’s main grains port in Rosario, slowing shipments of corn and soybeans just ahead of the South American harvest season.
The South American country is the world’s second largest corn shipper, behind the U.S. and is also a major exporter of soybeans.
Corn is the biggest U.S. crop, valued at USD66.7 billion in 2010, followed by soybeans at USD38.9 billion, government figures show. Wheat was fourth at USD13 billion, behind hay.
In the week ahead, grain traders will continue to monitor South America's corn and soybean crop and how La Nina weather patterns affect yields.
Russian, Ukraine and U.S. winter-wheat crop conditions will also be in focus, while traders await the USDA’s closely-watched World Agricultural Supply & Demand Estimates report for March on Friday.
Agricultural commodity traders shrugged off a broadly stronger U.S. dollar on Friday, instead focusing on market fundamentals.
On the Chicago Mercantile Exchange, soybeans for May delivery settled at USD13.3188 a bushel by close of trade Friday, the highest since September 21. On the week, prices gained 3.43%, the third consecutive weekly advance and the biggest since mid-October.
Soybean prices extended their win streak to ten straight trading sessions on Friday, rallying almost 10% since the beginning of February, as traders focused on distressed crops in major South American soy growers and on indications demand from top consumer China will remain robust in the near-term.
Influential industry group Informa Economics lowered its forecast of Brazil's soybean crop for the 2011-12 marketing season to 68 million tonnes, down from a previous estimate of 70 million.
Informa also cut its estimate for Paraguay's crop by 2.4m tonnes to 4m tonnes and raised its Argentine soy crop estimate by 1 million tonnes to 47.5 million tonnes.
However markets shrugged off the Argentinean estimate, after the nation’s biggest grains exchange in Rosario last week trimmed its forecast for Argentine soy production by 5 million tonnes to 44.5 million tonnes. The number also remains below the official USDA forecast of 48 million tonnes.
South America is a major soybean exporter and competes with the U.S. for business on the global market. A downbeat crop outlook there could increase demand for U.S. supplies.
Meanwhile, prices continued to draw support from increased demand prospects from China. Two weeks ago, the Asian nation bought 2.92 million tonnes of the oilseed from U.S. farmers in what was the biggest one-day deal on record.
China imports 60% of soybeans shipped around the world, with the bulk of its purchases coming from the U.S. and Brazil, the world's top exporters.
Meanwhile, wheat for May delivery settled at USD6.7225 a bushel by close of trade on Friday, the highest since February 7. The contract added 4.33% on the week.
Wheat futures have gained in four of the past five trading sessions, as adverse weather conditions in the U.S. Great Plains sparked a wave of short-covering, or bets on falling prices, by hedge funds and large institutional investors.
Weather forecasts pointed to unseasonably warm and windy weather moving into the Southwest corner of the U.S. Plains hard red winter wheat region during the upcoming week.
Also supporting sentiment on the grain, the U.S. Department of Agriculture reported a sale of 120,000 tonnes of wheat to Iran on Friday, the first purchase of U.S. wheat by the Persian Gulf country in nearly three years.
Market participants were unable to confirm which U.S. grain company sold the wheat to Iran, whose nuclear ambitions are at the heart of U.S.-led sanctions against the country.
U.S. food exports, including grain, to Iran are approved under a humanitarian authorization by the Treasury Department to ensure necessary items reach the Iranian people.
Meanwhile, Russia's Agriculture Ministry said that it expects domestic wheat production in the 2012-13 marketing season to rise to 57 million tonnes from 56.2 million in the 2011-12 year. However, exports are seen falling to 20 million tonnes from 21 million.
Russia is a major wheat exporter, while the U.S. is the world’s third largest wheat producer and biggest shipper of the grain.
Elsewhere on the Chicago Board of Trade, corn futures for May delivery settled at USD6.5388 a bushel by close of trade on Friday, advancing 1.9% on the week.
While corn prices have underperformed wheat and soybeans in recent weeks, prices are expected to remain supported amid speculation of strong demand from China.
Prices were further supported by a strike of Argentine dock workers at the country’s main grains port in Rosario, slowing shipments of corn and soybeans just ahead of the South American harvest season.
The South American country is the world’s second largest corn shipper, behind the U.S. and is also a major exporter of soybeans.
Corn is the biggest U.S. crop, valued at USD66.7 billion in 2010, followed by soybeans at USD38.9 billion, government figures show. Wheat was fourth at USD13 billion, behind hay.
In the week ahead, grain traders will continue to monitor South America's corn and soybean crop and how La Nina weather patterns affect yields.
Russian, Ukraine and U.S. winter-wheat crop conditions will also be in focus, while traders await the USDA’s closely-watched World Agricultural Supply & Demand Estimates report for March on Friday.