Bloomberg News

Soybeans Approach Biggest Weekly Gain Since August on Exports

December 07, 2012

Soybeans headed for the biggest weekly advance since August on signs of increasing demand for supplies from the U.S. while drought threatens to slow the pace of barge shipments on the Mississippi River.

U.S. exporters sold 1.14 million metric tons of soybeans in the week ended Nov. 29, the most in nine weeks and up more than threefold from a week earlier, the Department of Agriculture said yesterday. The Mississippi River, the main thoroughfare for shipping Midwest crops to the Gulf of Mexico to be exported, may drop to a level in St. Louis low enough to restrict barge traffic as early as Dec. 26, the National Weather Service says.

“U.S. soybean exports were comparably strong,” Rory Deverell, a commodity risk manager with INTL FCStone Inc. in Dublin, said today in an e-mailed report. “U.S. river system concerns continue to create uncertainty regarding price development and supply.”

Soybeans for January delivery fell 0.1 percent to $14.8975 a bushel by 7:39 a.m. on the Chicago Board of Trade, heading for a 3.5 percent increase this week, the biggest gain for a most- active contract since the week ended Aug. 24. Earlier today, the price touched $14.9825 a bushel, the highest since Nov. 9. Soybeans surged to a record $17.89 a bushel in September as the U.S. experienced its worst drought in more than 50 years.

Soybeans erased gains today as prospects improved for crops in Argentina, where wet weather has delayed planting in recent weeks. A drier trend will develop in the country after today, with just a few showers possible in some areas until at least Dec. 12, Telvent DTN said.

Argentina, Brazil

The USDA is scheduled to update its supply and demand estimates for U.S. and world crops on Dec. 11. The agency may cut its outlook on Argentina’s harvest to 54.5 million tons, from 55 million tons forecast last month, according to a Bloomberg survey of analysts. Brazil’s harvest may be 80.84 million tons, down from the earlier forecast at 81 million tons.

Corn for delivery in March fell 0.6 percent to $7.47 a bushel. Wheat for March delivery dropped 0.5 percent to $8.58 a bushel in Chicago, while in Paris, milling wheat for the same delivery month gained 0.4 percent to 267.50 euros ($345.21) a ton on NYSE Liffe.

The USDA will probably pare its estimate for global wheat inventories before the 2013 Northern Hemisphere harvests to 173.6 million tons, from 174.2 million last month, according to the Bloomberg survey.

People are probably “underestimating the problems” in global supply, and that may make wheat the driver of grain prices next year, Abdolreza Abbassian, an economist at the United Nation’s Food & Agriculture Organization, said yesterday. Wheat-growing areas of Russia, eastern Europe and Australia have experienced dry weather this year, while crops in Argentina were threatened by excess rain.

To contact the reporters on this story: Whitney McFerron in London at wmcferron1@bloomberg.net; Luzi Ann Javier in Singapore at ljavier@bloomberg.net

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


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