By Brendan O’Brien
CHICAGO, Dec 8 (Reuters) – Chicago soybean futures rose on Friday, riding the momentum of strong demand after the U.S. Department of Agriculture (USDA) announced more sales to China.
Corn also rose as the USDA confirmed export sales to undisclosed buyers.
Both markets pushed higher in early session trading by the prospect that the USDA report due out at 1700 GMT will show the magnitude at which drought conditions in Brazil have imperilled crop yields.
“Traders are expecting the USDA to cut the Brazilian crop estimate today. The USDA has been super slow to adapt to all the adverse weather they’ve had,” said Lane Akre, economist with ProFarmer.
Recent rains in Brazil and Argentina, both key exporters of soybeans and corn, have helped crops after dry, hot spells, but traders still have been apprehensive about potential damage.
Conab cut its forecast for Brazil’s 2023/24 soybean output by a little over 2 million tons, but the official forecaster still predicted a record harvest.
It also cut its Brazil corn production forecast by around half a million tons.
Chicago Board of Trade (CBOT) soybeans Sv1 were up 0.8% at $13.22-1/4 a bushel. Corn Cv1 inched up 0.26% to $4.89-1/4 a bushel at 1548 GMT.
The USDA confirmed private sales of 136,000 metric tons of U.S. soybeans and 110,000 metric tons of U.S. soft red winter wheat to China for shipment in the 2023/24 marketing year.
The USDA also reported sales of 165,000 metric tons of U.S. corn to unknown destinations.
The most active wheat contract Wv1 was down 0.47% at $6.39-1/4 a bushel. The benchmark was consolidating below Wednesday’s four-month peak but was up nearly 6% so far this week.
The U.S. government has reported sales of more than 1 million metric tons of U.S. wheat to China this week, the biggest one-week total to the Asian country since July 2014.
(Additional reporting by Gus Trompiz in Paris and Peter Hobson in Canberra; Editing by Richard Chang)