Soybeans Rise With A Thin Cover, As Do Wheat And Corn

Traders reported a nearly 2% surge in U.S. soybean futures on Tuesday, driven by short-covering as the U.S. harvest winds down, optimism for export sales to China, and concern over the availability of South American supplies.

Wheat futures rebounded from early declines as traders focused on the unpredictability of grain supplies from the Black Sea export corridor and crop concerns in the Southern Hemisphere. Corn followed the hardness trend.

After reaching a contract high of $14.49 per bushel on September 23, the January contract for soybeans closed up 28-1/4 cents at $14.47-3/4 per bushel.

CBOT Wheat for December finished at $9.02-1/2 per bushel, an increase of 20-1/4 cents, while corn for December closed at $6.97-3/4 per bushel, an increase of 6-1/4 cents.

As a result of chart-driven purchasing, the benchmark January contract for soybeans rose beyond its October trading range.

"We are chasing out a lot of shorts with this move," said Terry Linn, an analyst with Linn and Associates in Chicago, adding that obstructions by protesters in Brazil, the largest soy exporter in the world, were also cause for concern.

The principal entry road to Brazil's Paranagua port, the country's second-busiest for grain exports, remained blocked by protestors on Tuesday, as supporters of outgoing Brazilian President Jair Bolsonaro demonstrated over his narrow election loss to the left-leaning Luiz Inácio Lula da Silva.

Linn noted, "there was concern that this could persist and have a severe impact on agricultural flows and exports."

The outlook for soy output in Brazil remains optimistic. StoneX commodity brokerage raised its 2022/23 soybean crop forecast from 153.8 million tonnes to 154.35 million tonnes.

According to the U.S. Department of Agriculture, as of October 30, 88% of the crop has been harvested. The corn harvest was 76% complete.

Concerns about the future of grain exports from war-torn Ukraine pushed CBOT wheat prices to their highest level in two weeks. According to industry insiders, insurers no longer issue new cargo insurance coverage for Black Sea exports via a U.N.-backed safe corridor after Russia's withdrawal from the corridor.

In the meantime, the Argentine government is ready to announce measures that will allow wheat exporters to delay shipments following the devastation of the harvest by a severe drought.

Additionally, dry conditions have affected the 2023 winter wheat harvest in the United States. Monday, the USDA rated 28% of the crop as good to excellent, the lowest percentage for this time of year since records began in 1987.