May 7, 2020 / 3:45 AM / 19 days ago

GRAINS-Soybeans rebound on Chinese buying, corn up on firmer oil prices

* Soybeans up for 2 out of 3 sessions as China buys U.S. cargoes

* Corn firms as higher oil prices revive hopes for ethanol demand (Adds details on oil prices, speculators positioning, quote; updates prices)

By Naveen Thukral

SINGAPORE, May 7 (Reuters) - Chicago soybean futures rebounded on Thursday as Chinese cargo purchases supported the market, although concerns over worsening relations between Beijing and Washington kept a lid on prices.

Corn rose as higher oil prices boosted hopes for ethanol demand. Wheat edged up, but improved weather for Northern Hemisphere crops limited gains.

The soybean and corn markets were also underpinned by expectations of higher purchases by the feed industry as U.S. meat demand jumps.

“The U.S. reported a big jump in pork sales to China in March – a good reason to think higher domestic use of soybeans can persist,” said Tobin Gorey, director of agriculture strategy at Commonwealth Bank of Australia.

“Recent rainfall, and some more likely to be realised soon, has shrunk the area of crop worries for the (wheat) market.”

The most-active soybean contract on the Chicago Board Of Trade was up 0.5% at $8.37 a bushel by 0315 GMT, rising for two of three sessions. It closed down 0.8% on Wednesday.

Corn added 0.3% to $3.15-1/4 and wheat was up 0.4% at $5.19-1/2 a bushel.

The U.S. Department of Agriculture announced that Chinese buyers had booked deals for 378,000 tonnes of soybeans from the United States.

China said on Wednesday tariffs should not be used as retaliation after U.S. President Donald Trump threatened the country over its handling of the novel coronavirus.

Oil prices rose on Thursday after U.S. inventories swelled less than expected, but market watchers predicted further gains could be capped by the ongoing glut in crude supplies as the coronavirus pandemic crushes fuel demand.

U.S. Energy Information Administration reported an increase in ethanol production for the first time since March 4, while ethanol stocks trimmed 725,000 BBLS.

European Union wheat exporters are set to record their best export season for years with record shipments expected from top exporter France, traders said on Wednesday.

For the current July 2019/June 2020 season, the EU Commission this week raised its monthly forecast for exports of soft wheat, or common wheat, from the EU plus Britain to 31.8 million tonnes, a four-year high.

Commodity funds were net sellers of CBOT corn, wheat, soybean, soyoil and soymeal futures on Wednesday, traders said. (Reporting by Naveen Thukral; Editing by Aditya Soni)

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