Forexpros – U.S. grain futures ended the week sharply higher on Friday, with soybean futures rallying to the highest level since July 2008, while corn and wheat futures surged to multi-week highs.
On the Chicago Mercantile Exchange, soybeans for July delivery settled at USD14.9263 a bushel by close of trade Friday. Earlier in the day, prices touched USD15.0638 a bushel, the highest since July 13, 2008.
On the week, soybean futures rose 1.2%, the fifth consecutive weekly gain.
Soybean futures rose above the key USD15.00-a-bushel level on Friday for the first time in nearly four years amid further evidence demand for U.S. soy from top consumer China remains strong.
The U.S. Department of Agriculture said that U.S. farmers sold 1.4 million tonnes of soybeans last week, above a range of trade expectations for 850,000 to 1.3 million tonnes.
Top consume China bought nearly 60% of the weekly total.
In addition, the USDA confirmed a sale of 110,000 tonnes of U.S. soybeans to China for delivery in the 2012-13 marketing year that begins September 1.
The agency reported another sale of 116,000 tonnes to an unknown destination, thought by many market participants to be China as well.
China is the world’s largest soybean consumer and is expected to account for nearly 60% of global trade of the grain in the 2011-12 season, according to the USDA.
Meanwhile, ongoing concerns over drought-stricken crop in major South American growers provided further support.
The Buenos Aires Grains Exchange on Thursday lowered its outlook for Argentina’s soy crop to 43 million tonnes, down from a previous estimate of 44 million.
The downgrade fuelled speculation the USDA will slash its own estimates on the country’s soy output in its next supply-and-demand report due in early May.
Argentina is a major soy exporter and competes with the U.S. for business on the global market. A downbeat Argentinean crop outlook could increase demand for U.S. supplies.
Soybean prices have rallied nearly 20% since the beginning of February, and are up almost 6% in April, as market sentiment has been dominated by concerns over distressed crops in major South American soy growers and on hopes demand from top consumer China will remain robust in the near-term.
Elsewhere on the Chicago Board of Trade, corn futures for May delivery settled at USD6.5375 a bushel by close of trade on Friday.
Earlier in the day, prices hit USD6.5475 a bushel, the highest since April 9. On the week, prices gained 6.15%, the largest weekly advance in almost 11 months.
Corn soared by nearly 5% on Friday after the USDA confirmed a sale of 1.56 million metric tons of U.S. corn last week, the largest one-day sale of U.S. corn since 1991 and the sixth largest export sale on record.
While the agency did not confirm the buyer, market participants speculated the bulk of the shipment was headed for China.
The USDA also reported another 120,000 metric tons of corn sold for delivery to China, as a confirmed buyer, in the current marketing year.
Last week, China’s state-owned grain-stockpiling, Sinograin, said that the agency is ready boost purchases to replenish depleted reserves if the prices are attractive. Corn prices dropped to a three-month low of USD5.99 on April 18.
In total, the USDA reported sales of 2.84 million metric tons to China or unknown buyers last week.
The U.S. produced 38% of the world’s corn last year, making it the both world’s largest corn producing nation and the largest exporter of the grain, while China is the world’s largest consumer of the grain.
Some chart buying also contributed to gains, after prices broke above key resistance levels at their 50-day and 100-day moving averages, triggering fresh buy orders amid bullish chart signals.
Meanwhile, wheat for July delivery settled at USD6.4938 a bushel by close of trade on Friday. Earlier in the day, prices touched USD6.5488 a bushel, the highest since April 10. Prices jumped by 4.15% on the week.
Wheat prices rose on Friday as adverse weather conditions in key wheat-growing regions in the U.S. fuelled concerns over crop conditions.
Meanwhile, USDA export data revealed that net export sales of U.S. wheat totaled 744,100 tonnes last week, above estimates for a range of estimates between 450,000 to 650,000 tonnes.
Prices found further support after the International Grain Council cut its outlook for global wheat production in the 2012-13 marketing year to 676 million tonnes, down 5 million from a previous estimate.
Corn is the biggest U.S. crop, valued at USD66.7 billion in 2010, followed by soybeans at USD38.9 billion, government figures show. Wheat was fourth at USD13 billion, behind hay.
In the week ahead, grain traders will continue to monitor weather conditions in South America and throughout the U.S. Corn-and-Wheat-Belt regions.
Meanwhile, the USDA was to release its weekly crop progress and plating progress reports on Monday, while markets await the agency’s weekly exports data scheduled for release on Thursday.
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