Soybeans extend run, hitting 2-year top on China buying spree

09/17/2020 | 01:14pm

CHICAGO, Sept 17 (Reuters) - U.S. soybean futures extended their rally on Thursday, rising nearly 2% to set a new two-year high as brisk demand from China continued to support the oilseed market.

Corn rose as the strength in soybeans overshadowed pressure from a smaller-than-expected Chinese corn import quota. Wheat futures advanced on firming global cash prices.

As of 11:58 a.m. CDT (1658 GMT), Chicago Board of Trade November soybean futures were up 19 cents at $10.30-1/4 per bushel after reaching $10.32-1/4, a life-of-contract top and the highest price for a most-active contract on a continuous chart since May 2018.

CBOT December corn was up 5 cents at $3.76-3/4 a bushel and December wheat was up 13 cents at $5.55 a bushel.

Soybeans led the move higher, fueled by unrelenting Chinese demand. The U.S. Department of Agriculture has announced U.S. soy sales to China in each of the last 10 business days, including Thursday's confirmation of 264,000 tonnes, along with and another 360,500 tonnes sold to unknown destinations.

"Until we see our Chinese friends relenting, that is the issue everybody will be looking at," said Dan Basse, president of AgResource Co in Chicago. "When they finish (buying) is anybody's guess," Basse said.

Corn futures briefly dipped lower, pressured after China set its tariff rate quota for corn, wheat and rice imports in calendar year 2021 at the same volumes as previous years. Some traders had expected a larger corn import quota in light of a flurry of recent Chinese corn purchases.

Others downplayed the market impact of the quotas.

"If they (China) need to buy an extra 10 million tonnes of corn, they will make the changes on their quota and you will know after the fact ... So it's kind of meaningless," said Terry Linn, analyst with Linn & Associates in Chicago.

Wheat futures firmed on signs of rising global cash prices. Egypt's main state wheat buyer on Wednesday booked 235,000 tonnes of Russian and Polish-origin wheat at prices that were $8 to $10 per tonne higher than those paid at Egypt's previous international tender on Sept. 3.

(Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore Editing by Devika Syamnath, David Goodman and Diane Craft)

© Thomson Reuters 2020
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