Soybeans Climb to One-Week High on Signs of Tight U.S. Supplies

March 19, 2014 04:04 AM
 
soybean field

Soybeans climbed to the highest in more than a week in Chicago on signs of tightening U.S. stockpiles. Wheat and corn fell.

Demand from domestic processors in the U.S. rose 3.9 percent in February from a year earlier, industry data showed this week, and exporters sold more soybeans since the marketing year began in September than the U.S. Department of Agriculture projects exports should reach for the full season. China boosted purchases of U.S. beans this year as insurance against potential delays in South America, researcher Oil World said. U.S. reserves at the end of August will be 145 million bushels, down from 150 million estimated in February, the USDA said March 10.

"The market’s still pretty tight," Paul Deane, an analyst at Australia & New Zealand Banking Group Ltd., said by phone from Melbourne. "In the U.S., there’s not going to be a lot of soybeans left at the end of the season."

Soybeans for May delivery climbed 1 percent to $14.325 a bushel by 7:45 a.m. on the Chicago Board of Trade. Earlier the price touched $14.42, the highest for a most-active contract since March 10. Prices advanced 1.9 percent yesterday, the biggest gain since Nov. 22.

While the USDA estimates the U.S. will ship 41.6 million metric tons in the 2013-14 season, exporters already sold 44.3 million tons, government data show. About 6.2 million tons are still waiting to be shipped. Some sales may be canceled because China, the biggest buyer, has ample supplies, Oil World said. Shandong Sunrise Grain and Oil Trading Ltd., China’s top soybean importer, said it resold three shipments of Brazilian beans to crushers in the U.S. because of large supplies in the country.

 

Tensions

 

Wheat for May delivery fell 0.6 percent to $6.885 a bushel in Chicago, after climbing 2.7 percent yesterday. Milling wheat for November delivery in Paris fell 0.2 percent to 200.50 euros ($279.16) a ton on NYSE Liffe. Wheat is up 14 percent this year in Chicago on concern that tensions between Russia and Ukraine will disrupt shipments. The two countries are the fifth- and sixth-largest exporters, respectively, USDA data show.

"The confidence of international buyers to purchase further Ukrainian supplies is being tested," Jack Watts, a senior analyst at the U.K.’s Agriculture & Horticulture Development Board in Kenilworth, England, said in an online report today. "This could well push demand to other origins and, with a perception that Ukraine’s grain is less accessible to the world market, may maintain price support."

Corn for May delivery dropped 0.1 percent to $4.8575 a bushel in Chicago, after climbing 1.5 percent yesterday. The grain has increased 15 percent this year.

 

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