Soyabeans rally as crop conditions drop, soyaoil prices rise
CHICAGO: US soyabean futures rallied on Tuesday on eroding Midwest crop conditions and improving export demand, and as soyaoil prices rose another 3% amid further gains in crude oil markets.
Corn futures also climbed on deteriorating crop conditions across the heart of the farm belt. Wheat prices firmed on spillover support from rising corn and soya, though gains were limited by a firm US dollar.
Soybeans posted their strongest percentage gains in nearly two months on Tuesday after the US Department of Agriculture (USDA) reported a weekly decline in crop conditions and as severely hot weather was forecast for the heart of the Midwest crop belt.
Demand for soya, meanwhile, was also improving. The USDA confirmed a private sale of US soyabeans to China in its first daily sales announcement since reporting a string of purchases by the top importer earlier this month.
"We're starting to sell beans to China again so all of a sudden our demand profile is picking up a bit," said Jack Scoville, analyst with the Price Group.
"The crop condition ratings yesterday showed a deterioration and ideas are that, with the weather developing how it is, we could see more," he said.
Corn crop conditions dropped by more than expected in the past week, particularly in the eastern Midwest. The steepest drop was in Illinois, where the heat index was expected to climb above 100 Fahrenheit (37.8 Celsius) on Tuesday and Wednesday.
Chicago Board of Trade November soyabeans jumped 42-1/2 cents to $13.35-1/4 a bushel by 12:10 p.m. CDT (1710 GMT), the contract's strongest percentage gain since June 30. December corn rose 9-1/2 cents to $5.45 a bushel, while CBOT December wheat added 1/4 cent to $7.33-3/4 a bushel.
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