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U.S. grains: Soybeans hit two-month high on export demand

Soybeans touched their highest price in more than two months on Monday, shaking off earlier losses on support from export demand and soaring soy meal.

Chicago Board of Trade wheat futures hit a two-week high as worries about harvests in Argentina and Australia bolstered potential demand for U.S. wheat.

Corn also rose, as funds covered part of their short positions in corn and wheat ahead of Thursday's Thanksgiving holiday.

January soybeans touched $13.34-1/2, the highest nearby price since Sept. 20 (all figures US$).

The turnaround was triggered by strength in soymeal, which surged 2.2 per cent due to tight cash supplies, as well as U.S. export inspections data that pointed to strong Chinese demand for soybeans, said Terry Reilly, senior commodity analyst at Futures International in Chicago.

"The export inspections came out below expectations, but they were very strong for China," Reilly said.

CBOT January soybeans rose 0.7 per cent, or 9-3/4 cents, to $13.29-1/4 a bushel, building on Friday's 2.2 per cent gain.

Exporters sold 120,000 tonnes of U.S. soybeans to unknown destinations for 2014-15 delivery, the U.S. Agriculture Department said on Monday.

USDA on Friday confirmed sales of 115,000 tonnes of U.S. soybeans to China, after reporting on Thursday weekly soybean sales well above expectations at nearly 1.4 million tonnes.

Chicago Board of Trade December wheat rose 0.5 per cent, or three cents, to $6.52-1/2 a bushel, climbing for a third straight session. It earlier reached $6.55, a front-month level last reached on Nov. 11.

"Funds have (previously) been heavy sellers in the wheat pit and they're sitting relatively short on corn, so we're seeing a bit of buying, because CBOT will be closed on Thursday, short day on Friday," said Karl Setzer, market analyst at MaxYield Co-op in West Bend, Iowa.

Improving competitiveness of U.S. wheat, as suggested by strong weekly export data last week, and worries about weather damage in key exporters Argentina and Australia have helped stir Chicago futures.

"Previously, you have seen tenders bypassing U.S. wheat, but now with Australia for one seeing unfavourable weather conditions, this could shift demand to the U.S," said Vanessa Tan, investment analyst at Phillip Futures Singapore.

Unseasonal rains in Western Australia and frost on the country's east coast have hit wheat crops in the world's No. 2 exporter of the grain, dragging down quality and reducing harvests.

Elsewhere, the Rosario Grains Exchange last week forecast Argentina's wheat crop at 9.1 million tonnes in its first estimate of the season, well below the 11-million-tonne view of the U.S. Department of Agriculture.

CBOT December corn added 0.6 per cent, or 2-1/2 cents, at $4.24-3/4 a bushel, picking up support from a strong U.S. cash market, Setzer said.

The trade was awaiting USDA's weekly report on crop progress and conditions, due Monday at 3 p.m. CDT. The corn harvest was likely 95 per cent complete as of Nov. 24, up four percentage points from a week earlier, according to the average of estimates in a Reuters poll of 11 analysts.

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