Soyabeans near three-week high

July 12, 2013

US grains
US grains

US new-crop soyabeans futures rose to a nearly three-week high on Wednesday on worries about planting delays and potentially stressful crop weather, traders said. Corn futures ended mixed with new-crop December edging lower, while wheat was mostly higher.

At the Chicago Board of Trade, new-crop November soyabeans ended up 8-1/2 cents at $12.84-3/4 per bushel. The contract broke through its 200-day moving average at $12.84 and peaked at $12.95, its highest level since June 20, before paring gains. November soya has risen 4.6 percent this week, after settling Friday at $12.28-1/4. September corn ended up 2 cents at $5.53-3/4 a bushel while benchmark December fell 1/4 cent at $5.21-1/2. September wheat rose 1-1/2 cents to $6.79.

New-crop soyabeans led the way up on concern about prospects for the US harvest. Weather this summer has been mostly favourable for the soyabean crop, and the US Department of Agriculture has rated about two-thirds of the crop as good to excellent. But the crop is developing more slowly than normal after a cool, wet spring. And some acres have yet to be planted – especially in the eastern Midwest, where farmers typically plant so-called “double-crop” soyabeans immediately after harvesting winter wheat, in the same fields.

Rains have slowed the region’s soft red wheat harvest, in turn stalling soyabeans. The USDA last month projected US soyabean plantings at 77.7 million acres and indicated that 10 percent would be planted after another crop. “It’s getting so late in the year … to double-crop that soyabean acreage estimates are going to be trimmed,” said Ken Smithmier, an analyst with the Hightower Group in Chicago. “The crop is behind in a lot of areas, and we still have a threat of an early frost. It’s tough to be negative toward that market, when you mix that in with the old-crop support that we’ve had,” Smithmier said.

The market is closely watching demand in China, the world’s largest soyabean buyer, which imported 6.93 million tonnes of soyabeans in June, up 35.9 percent from May. “Soyabean prices have also been finding support from June’s Chinese soyabean import figures,” Commerzbank said. “Import activity had long been hampered by delayed deliveries from Brazil. These problems have now been resolved.” Supplies of old-crop soyabeans remaining from the last US harvest are extremely tight, a factor that sent the front July futures contract soaring to a contract high on Tuesday at $16.30 a bushel. The thinly traded contract is in delivery and expires on Friday. Courtesy Reuters

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