Soybeans rise to one-month high on talk of Chinese demand
Soybean futures touched a one-month high Tuesday on fresh export demand from China and concerns about dry weather in South American soy regions, traders said.
Corn futures were roughly unchanged but wheat turned lower on profit-taking after rising to a one-month top.
At the Chicago Board of Trade as of 10:30 a.m. CST (1630 GMT), CBOT March soybeans were up 21-3/4 cents at $14.51 per bushel after reaching $14.53-3/4, the contract's highest level since Dec. 19.
March wheat was down 11 cents at $7.80-1/4 per bushel, retreating after hitting a one-month high at $7.99-3/4. March corn was up 1/2 cent at $7.28 a bushel.
Soybeans advanced after the U.S. Department of Agriculture said private exporters reported sales of 120,000 tonnes of optional origin soybeans to China for delivery in 2013/14.
Analysts said the profit margins for crushing soybeans in China have improved, encouraging processors to book additional cargoes.
"There is talk that China is back in, shopping for February and March," said Roy Huckabay at the Linn Group, a Chicago brokerage, adding that cash basis values for soybeans had firmed in some U.S. locations.
Additional support stemmed from rumors that Brazil has over-booked soybean sales, along with concerns about infrastructure limitations in that country, which is projected as the world's top soybean producer and supplier for the 2012/13 marketing year.
Analysts have expressed concern that Brazil may not be able to move its expected record-large soybean harvest to port in a timely manner.
"It looks like they (Brazil) are over-booked for February," said Jeff Thompson, a broker at ABN AMRO in Chicago. "A big buy program all at once doesn't work well, and the weather is dry for the next 10 days down there," Thompson added.
Rains will fall over Brazil's northeast and the main center-west soy belt this week, while the southern producing states should remain dry for a second straight week, local meteorologist Somar said on Monday.
CBOT wheat fell on profit-taking after rising in five of the previous six sessions. Wheat has drawn support from a worsening drought across the U.S. grain belt and dryness in parts of Argentina and Brazil.
"The main issue in North America is the dryness in the southern Plains," said John Dee, a meteorologist at Global Weather Monitoring.
Dee said it would be dry in the Plains and Midwest this week followed by light precipitation of 0.20 inch to 0.60 inch early next week then it would turn dry again.
"There are difficult growing conditions for wheat throughout the United States," said Luke Mathews, a commodities strategist at the Commonwealth Bank of Australia.
Severe drought in the Plains left the U.S. winter wheat crop at a record low before it entered dormancy, the U.S. Agriculture Department said late last year.
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