Soybeans rally, following soymeal gains

[CHICAGO] Chicago soybean futures rallied on Friday (Dec 7), supported by soymeal demand and weather issues in South America.

Corn followed higher, although crops in Argentina and Brazil are likely less impacted by drought in the region as they have more time to benefit from rainfall expected later this month.

Wheat rebounded from a new 2-1/2-month low, pressured by technical selling.

Grain markets also looked to a series of US Department of Agriculture (USDA) crop reports scheduled for Jan 12, including updated estimates of South American production.

"We're going to continue to see this erratic movement until we get past USDA's reports," said Arlan Suderman, chief commodities economist at StoneX.

The most-active soybean contract on the Chicago Board of Trade (CBOT) added 23 US cents to end at US$14.10-1/4 a bushel, after earlier hitting US$14.15, the highest for a most-active contract since, Jun 11, 2021. The March contract ended the week up 71 US cents, a 7.5 per cent gain.

CBOT corn added 3 to 1/4 US cents to US$6.06-3/4 a bushel, firming 2.3 per cent for the week.

CBOT wheat firmed 12-1/2 US cents to US$7.58-1/2 a bushel, after falling to US$7.35-1/2, its lowest price since Oct 15, 2021. For the week, the most-active wheat lost 12-1/4 US cents, down 1.6 per cent.

Soybeans were led by earlier gains in CBOT soymeal futures , with new life of contract highs in several contract months, exacerbated by Covid-related labor concerns in Argentina.

"With Argentina on the sidelines a little bit, that leaves the US as the only game in town for meal," said Joe Davis, director of commodity sales at Futures International.

Dryness across Brazil and Argentina continue to support soybeans, while corn in the region has more time to develop before dryness impacts yields, as forecasts call for increased rainfall in Argentina in the coming 6-10 days.

Fresh US export notices also underpinned corn and soybeans, with a sale of 176,784 tonnes of corn to Mexico and 120,000 tonnes of soybeans to unknown destinations, the USDA said.

REUTERS