Bloomberg News

Soybeans Advance to Highest Since September as Brazil Cuts Crop Forecast

March 09, 2012

Soybean futures rose for a second day to the highest level in five months in Chicago after Brazil, the largest shipper of the oilseed, cut its forecast for production this year.

Farmers in Brazil will harvest 68.7 million metric tons of soybeans in the crop year through August, less than a February estimate of 69.2 million tons, after dry weather parched crops in the south, government crop forecaster Conab reported yesterday.

Brazil is the second-largest grower of soybeans after the U.S. and the biggest exporter, according to data from the U.S. Department of Agriculture. The USDA is scheduled to update its production estimates later today, and may pare its estimate for Brazil’s output to 69.5 million tons, from 72 million tons last month, according to a Bloomberg News survey.

“Soybeans continue their upward spurt on largely better- than-expected export figures and because of the expectation of a downward revision by the USDA of South American production,” Paris-based farm adviser Agritel wrote in a market comment.

May-delivery soybeans rose as much as 1.3 percent to $13.555 a bushel on the Chicago Board of Trade, the highest level for the most-active contract since Sept. 19, before trading at $13.5275 by 11:41 a.m. London time. That took the five-day gain to 1.5 percent, the fourth weekly advance and the longest such winning streak since July 22.

U.S. exporters sold 165,000 tons of soybeans to China for delivery in the 2012-13 season that starts Sept. 1, the USDA reported yesterday.

South America Weather

“Everybody’s waiting to see what the USDA comes out with later today,” Neil Burgess, a commodity analyst at Westpac Banking Corp. (WBC), said from Sydney. “The weather conditions out of South America have been playing on people’s minds.”

In Argentina, the third-largest grower behind the U.S. and Brazil, output will probably reach 46.2 million tons, unchanged from a previous estimate, the Buenos Aires Cereals Exchange said yesterday.

The USDA’s outlook on the global supply and demand for soybeans, corn, wheat and other crops is scheduled at 8:30 a.m. in Washington today. Today is the three-year anniversary of the beginning of a bull market in U.S. stocks that began after the housing crisis in 2008.

Corn for May delivery gained 0.4 percent to $6.38 a bushel in Chicago, paring the weekly loss to 2.6 percent. Wheat for May delivery rose 0.6 percent to $6.3875 in Chicago, trimming the weekly loss to 5.3 percent, still the biggest such decline since the five days ended Sept. 23.

Milling wheat for May delivery traded on NYSE Liffe in Paris advanced 1.6 percent to 207 euros ($273.63) a ton, while the November-delivery contract climbed 0.9 percent to 194.75 euros.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net Claudia Carpenter at ccarpenter2@bloomberg.net


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