Demand from exporters and a rise in barge freight costs caused soybean barge offers to strengthen on Friday, while many US corn sales to China caused barge offers to rise. of corn fell slightly, according to distributors.
The US Department of Agriculture (USDA) announced another 204,000 tons of private sales of US grains to China on Friday. With the most recent agreement, the sale of 2.752 million tons of grain to China has been confirmed in mid-March.
Before China’s buying spree, benchmark Chicago Board of Trade (CBOT) corn futures had hit a seven-month low on March 10. According to analysts, Chinese consumers found US supplies attractive due to falling prices, uncertainty surrounding exports from a rival source, Ukraine, and better navigation conditions on the Mississippi River.
There was a small increase in freight costs on Midwest rivers on Friday, boosting CIF barge bids. Traders also noted increased cargo demand through early April on the Illinois River and the Mississippi River in St. Louis. Empty barges were offered on the Ohio River on Friday at 475% of the rate, up from 450% on Thursday.
The CIF Gulf soybean barge offer price for March cargoes rose 2 cents from Thursday, reaching 105 cents above May CBOT futures (SK3). Barges for April soybeans were offered at 96 cents above futures. The FOB basis offered for April soybean export cargoes was around 116 cents on futures, up 4 cents from Thursday, and the offer for May cargoes held steady at 110 cents on futures.
There were persistent rumors that soybeans were being imported from Brazil for shipment to the US East Coast. CIF corn barges, loaded in March and offered for sale, were priced at 91 cents over CBOT May futures (CK3 ) on Friday, one cent less than what was quoted on Thursday. For April corn export cargoes, FOB offers remained about 103 cents above futures, and May cargoes were provided at about 100 cents above futures.
According to an article in the Russian economic weekly Vedomosti, Moscow may suggest temporarily halting wheat and sunflower exports due to falling prices. There is no such strategy, according to sources who spoke to Reuters; instead, the government wants exporters to offer prices high enough to offset farmers’ costs of production.
As soybean oil prices rise, palm oil prices rise too
Low York Hong, head of futures brokerage at AmInvestment Bank, said palm oil prices rose during the opening Asian session, reflecting the rally in soybean oil on the Chicago Stock Exchange on Friday.
The two oils are frequently marketed together as they are used in comparable products. While the Southern Peninsula Palm Oil Millers Association reported reduced CPO production from March 1-20, ITS and Amspec cargo inspectors reported increased palm oil exports from March 1-25. .
- CPO futures may find support at MYR3,500 or below.
- The low level places support at MYR3482 and resistance for CPO futures at MYR3613.
- Bursa Malaysia Derivatives’ June delivery contract is MYR38 more expensive, at MYR3550 per tonne.
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