US soybeans rise on Brazilian truck strike, wheat soft

imageCHICAGO: US soybean futures rose on Thursday on uncertainty over how long the Brazilian trucker strike will continue, which threatens to stall movement of freshly harvested soybeans onto the world market, traders and analysts said.

Corn prices were also firm while wheat futures eased, pressured by more reminders that US wheat is less competitive in the world market.

Chicago Board of Trade May soybeans gained 13-1/4 cents, or 1.3 percent to $ 10.21 a bushel by 11:25 a.m. CT (1725 GMT).

“Until the Brazilian trucker strike is resolved all you are going to do is give the shorts a reason to cover and keep the new sellers waiting for the beans to move into the world market,” said Terry Roggensack, an analyst with The Hightower Report.

“The supply is daunting,” added Roggensack, noting Brazilian farmers are poised to harvest a record soybean crop and the world stockpile is set to hit a new high of 89 million tonnes.

The Brazilian trucker strike, now in its second week, has crippled supply chains as truckers blocked roads protesting a higher fuel tax. Some truckers agreed to end the strike after the government said late Wednesday it would extend a year of free financing for vehicles and pass a law to benefit the sector if protesters ended the strike.

There were blockages on 91 roads in nine states by early afternoon Thursday, including top grains producers Mato Grosso and Parana, where the soybean harvest is peaking.

Chicago corn was firm by Thursday’s midsession, following the strength in soybeans, while wheat came off its lows with trade choppy and rangebound.

CBOT March corn rose 4-1/4 cents, or 1.1 percent, to $ 3.80 and March wheat fell 3/4 cent, or 0.1 percent at $ 4.98.

But a gloomy export outlook for wheat, a firm dollar and outlooks for much-needed moisture to improve the condition of the dormant hard red winter wheat crop pushed Kansas City wheat futures to fresh 4-1/2 year lows. All three US wheat market made contracts lows early Thursday.

While USDA reported on Thursday US weekly exports sales of wheat were up 23 percent from the prior week at 328,300 tonnes – year-to-date commitments remain 30 percent below a year ago.

“Clearly the market is still worried about the accumulation of US inventories and the potential for a large Hard Red Winter crop in the season ahead,” Commonwealth Bank of Australia analyst Tobin Gorey said.

Copyright Reuters, 2015

Dow Futures

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