* Soy gains on big export sales to China
* Corn lower on lack of confirmation of China sales
* Wheat down on good U.S. growing weather
(Updates U.S. market activity to close, adds new quotes)
By Michael Hirtzer
CHICAGO, April 20 (Reuters) – U.S. soybeans surged 2 percent on Friday,
touching a 7-1/2 month high in the biggest daily gain in three weeks, as strong
export demand from top soy buyer China and a weaker dollar helped prices rebound
from sharp losses earlier this week.
Corn and wheat futures each fell sharply at the Chicago Board of Trade,
posting steep weekly losses, pressured by beneficial growing weather in the
United States and the lack of confirmation of an export sale to China.
Forecasts for smaller crops in South America also supported soybean futures,
with benchmark CBOT May soybeans gaining 31 cents to $14.46-3/4 per
bushel, and concluding its fourth straight weekly gain.
Argentina cut its official estimate for this year’s soy and corn crops late
on Thursday, and many traders expect the U.S. Agriculture Department to slash
its own estimates in the USDA’s next supply-and-demand report due early next
month.
“The other rumbling is the bean yields coming out of Argentina. As they get
closer to 50 percent harvested, (they) are not getting better. And that has
people concerned we may see this (Argentine) bean crop below 43 million tonnes,”
said Mark Schultz, analyst at Northstar Commodity Investments.
Argentina’s Agriculture Ministry on Thursday pegged the soy crop at 42.9
million tonnes, compared to the latest USDA estimate of 45 million tonnes.
“There’s still the idea that USDA is overestimating South American soy
production and that’s going to be supportive,” Newedge USA analyst Dan Cekander
said.
USDA this week confirmed 230,000 tonnes of U.S. soybean sales to China, with
another 225,000 tonnes sold to an unknown destination, thought by many traders
to be China as well. U.S. soy exports last week were the most in more than a
month.
Also supportive was a weaker dollar, which hit a two-week low against the
euro amid better-than-expected business sentiment in Germany. Losses in the
greenback can make dollar-denominated commodities cheaper for holders of other
currencies.
CBOT May corn settled 8-1/2 cents lower at $6.12-1/2 per bushel, a
loss of 1.4 percent after having risen more than 3 percent on Thursday.
Corn futures had surged on ideas that China was purchasing U.S. cargoes of
the grain after prices slid to a three-month low earlier this week but the lack
of an announcement by USDA of such a sale spurred Friday’s sell-off and pushed
down prices down 2 percent for the week.
A Reuters poll 11 analysts on Friday pegged corn seedings early next week at
29 percent, compared to 17 percent complete this week. USDA was also expected to
release the first soybean planting progress in its weekly crop progress report
due Monday and analysts predicted seedings at 4 percent done.
AgResource, in its daily letter to clients, said most argue that China
secured 700,000 to 1.0 million tonnes of U.S. old- and new-crop corn with
Sinograin, COFCO and the privates all involved as buyers on Thursday.
Some even suggest that Sinograin has been given the “green light” to secure
as much as 4.0 million tonnes of U.S. corn when price and import profit are
correct, AgResource said.
But USDA confirmed no such sale on Friday.
“There is no big threat with the weather at this time. So you have a market
that has to live off either a weather problem, or some phenomenal demand,”
Schultz said.
“When you get ideas of big demand and it doesn’t turn out to be real, we
give it all back. It’s disappointing because thought yesterday was a
turnaround,” he added.
Corn exports last week were the lowest in three weeks, the USDA said, while
corn futures were on track to decline nearly 1.6 percent this week in the second
straight week of falls.
CBOT May wheat lost 9 cents to $6.15-3/4 per bushel, shedding more
than 1 percent for the week in the third straight weekly decline, pressured by
recent rainfall in the soft red winter wheat belt in the eastern Midwest.
Beneficial growing weather in the hard red winter wheat belt in the southern
U.S. Plains also weighed on wheat futures, with Kansas City Board of Trade May
wheat falling more than 1 percent.
Prices at 2:32 p.m. CDT (1932 GMT)
LAST NET PCT YTD
CHG CHG CHG
CBOT corn 612.50 -8.50 -1.4% -5.3%
CBOT soy 1446.75 31.00 2.2% 20.7%
CBOT meal 406.00 14.10 3.6% 31.2%
CBOT soyoil 55.83 0.66 1.2% 7.2%
CBOT wheat 615.75 -9.00 -1.4% -5.7%
CBOT rice 1550.50 16.50 1.1% 6.2%
EU wheat 216.50 -0.25 -0.1% 6.9%
US crude 103.61 0.78 0.8% 4.8%
Dow Jones 13,035 71 0.6% 6.7%
Gold 1642.76 0.28 0.0% 5.0%
Euro/dollar 1.3214 0.008 0.6% 2.1%
Dollar Index 79.1810 -0.3800 -0.5% -1.2%
Baltic Freight 1067 39 3.8% -38.6%
(Additional reporting by Julie Ingwersen, Sam Nelson and Karl Plume in Chicago;
Editing by Sofina Mirza-Reid and Alden Bentley)
