Soyabean futures gain
December 05, 2012
US soyabean futures hit a three-week high on Monday as adverse weather threatened production in Argentina and southern Brazil, two of the world’s top suppliers, but prices later slipped on spillover pressure from sinking corn and wheat prices. The first US wheat purchase by Egypt’s state buyer since April fuelled early gains, but prices turned lower by midday in a profit taking setback and amid concerns that US wheat would still face stiff competition in the global marketplace.
Corn closed modestly higher, but well below early peaks, weighed down by profit taking and sluggish exports. Soyabeans advanced because of traders’ concerns that overly wet weather in No 3 exporter Argentina and persistently dry conditions in southern areas of Brazil, the world’s largest supplier after the United States, would trim production at a time when global supplies were uncomfortably tight.
“The weather in South America is now front and center. There’s been a less-than-ideal start to planting and the market is building back in a weather premium after that really sharp selloff we saw in soyabean futures in November,” said Brian Basting, commodity research analyst with Advance Trading. Brazil was still expected to harvest a record-large crop next year amid ideal weather in central Brazil, but dryness in the south could limit the crop’s potential, analysts said on Monday.
Rains in Argentina this week may sustain flooding that has swamped some areas of the grain belt and delayed planting. Karl Setzer, a commodity trading advisor and market analyst with MaxYield Cooperative in West Bend, Iowa, said: “Crush is running high and our exports are high and the United States is the only source right now in the global market.” Chicago Board of Trade January soyabeans rose 15 cents, or 1 percent, to $14.53-3/4 per bushel, briefly rising above its 200-day moving average of $14.62-1/4 before slipping back.
Corn futures eked out the first gain in three sessions, but closed well below the day’s highs as sluggish exports limited buying interest. CBOT March futures added 2 cents to $7.54-3/4 a bushel. The US Department of Agriculture on Monday said only 9.6 million bushels of corn were inspected for export last week, just a quarter of the total in the same week a year earlier and season-to-date shipments were only half of last year’s pace. CBOT March wheat fell 2-3/4 cents, or 0.3 percent, to $8.60-3/4 per bushel after shedding 2.5 percent on Friday.