By Michael Hirtzer
CHICAGO, Oct 31 (Reuters) – U.S. soymeal shrugged off early
losses to gain 2 percent on Friday, on course for its biggest
monthly gain since 1976, as short-term supply strains in the
United States continued to fuel buying.
Soybeans were also higher, following gains in soymeal, while
wheat and corn futures declined on pressure from multiyear highs
in the dollar that made the crops less competitive in global
markets.
Front-month soymeal futures has climbed 11 percent
this week alone, putting them up 30 percent in October as a mix
of harvest delays, slow farmer selling and transport congestion
linked to record exports left operators scrambling for supplies.
The soymeal surge took some investors by surprise given the
U.S. soybean harvest, expected to yield a record volume, is
accelerating and should provide ample supply for processors who
make soymeal animal-feed.
“We expect the soybean rally to break. The logistical
railcar issues in the U.S. will ease, crush margins are good and
processors are crushing hard to fill the pipeline,” Rabobank
analysts said in a note.
“But even so, it might take a few more weeks until the
situation has sufficiently relaxed. The key question is if this
will happen before the December contracts expire, making short
bets on December … a risky gamble,” they said.
Chicago Board of Trade December soymeal was up $10 at
$390.00 per ton, just below their 1-1/2 month high reached on
Thursday. Soybeans for November delivery gained 14 cents
to $10.38-1/2 per bushel as of 12:02 p.m. CDT (1802 GMT).
Agribusiness giant Bunge on Thursday cited slow farmer
selling as a factor in its lower-than-expected third-quarter
earnings, and its head said the slow pace of crop sales by
farmers will likely stretch into next year.
GLOBAL SUPPLIES STILL AMPLE
Corn and wheat futures edged lower, however, after reaching
three- and two-month highs respectively in the previous session
as the dollar gained and the rouble fell, making Russian
supplies more attractive to importers. The yen also lost ground
to the dollar, pushing up U.S. corn prices into top market
Japan.
The dollar index hit a four-year high after upbeat
U.S. growth figures and expectations the Federal Reserve will
start raising interest rates sooner than thought previously.
“We are seeing money come out of the broader commodity
complex as the dollar goes to highs,” said Arlan Suderman,
analyst at Water Street Solutions.
CBOT December wheat fell 7-3/4 cents to $5.28-1/4 per
bushel while CBOT December corn declined 1 cent to $3.73.
Despite the declines, corn was on pace for a nearly 16
percent monthly gain – the largest since July of 2012 – while
wheat was up 10 percent in October, on track for the best
monthly performance since March.
The International Grains Council (IGC) underlined large
global supply by raising on Thursday its forecast for the
2014/15 global wheat crop by 1 million tonnes to a record 718
million tonnes, and its world corn crop estimate by 6 million
tonnes to 980 million tonnes, approaching last season’s record
983 million tonnes.
(Additional reporting by Julie Ingwersen in Chicago, Gus
Trompiz in Paris and Naveen Thukral in Singapore; Editing by
Himani Sarkar, editing by David Evans and W Simon)
