Soybeans and corn firm on higher oil prices, but set for weekly losses
SINGAPORE: Soybeans and corn rose on Friday as gains in oil prices supported agricultural goods, although expectations of ample global supplies limited the upside and left both markets on track for weekly losses. Wheat slid on prospects of a resumption of Black Sea grain exports. “The downside is limited at current levels,” said one grains trader in Singapore. “Oil is bit supportive but we don’t…
Soybeans and corn edged higher on Friday as oil price gains bolstered agricultural commodities, yet expectations of plentiful global supplies curbed gains and set both markets on course for weekly declines. Wheat, conversely, retreated on hopes of a resumption of grain shipments from the Black Sea. "The downside is limited at present," remarked a grains dealer in Singapore.
"Oil does offer some support, but we do not anticipate a substantial move until the upcoming US report." The most-traded soybean contract on the Chicago Board of Trade (CBOT) climbed 0.3% to $11.92-1/4 per bushel by 0225 GMT, while corn gained 0.1% to $4.40-1/2 per bushel. Wheat dropped 0.3% to $5.97-1/2 per bushel. Soybeans have fallen over 3% this week, on track for their largest weekly loss since late July, while corn is poised for a sixth straight weekly decline.
On Friday, grains and oilseeds benefited from a rally in crude oil futures, which often set the tone for farm products due to their increasing use in producing biofuels. Brent crude futures rose over $3 per barrel on Thursday as fresh attacks on tankers heightened concerns about oil supplies and prompted investors to reconsider the outlook for the US-Israeli conflict with Iran.
The USDA is set to release an update on US crop output in a monthly report next week. Experts anticipate the agency to slash its estimate of US corn production to 15.962 billion bushels, down from October's forecast of 16.034 billion, according to a Reuters poll. The harvest would be the second-largest on record, following last year's record crop.
The USDA is also expected to raise its projection of US wheat output. Wheat prices have surged this year as the Russia-Ukraine conflict disrupted grain exports via the Black Sea, but alternative shipping routes have averted potential shortages many traders feared. Russia and Ukraine have expressed interest in three-way peace talks with the US in Abu Dhabi on November 10 and 11, raising the possibility of restored access to Black Sea shipping lanes.
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