Soybeans Climb to 10-Month High as U.S. Reserves Seen Declining

April 9, 2014 04:00 AM
Soybeans Climb to 10-Month High as U.S. Reserves Seen Declining

Soybeans rose to the highest level in 10 months on speculation the U.S. will lower its outlook for domestic and global inventories by the end of the 2013-14 season from a month ago. Corn and wheat rose to a one-week high.

The U.S. Department of Agriculture may cut its forecast for domestic soybean stocks before the next harvest by 4.5 percent to 138.5 million bushels, from a March estimate of 145 million, based on a Bloomberg survey. U.S. export sales in the season started Sept. 1 were up 24 percent from a year earlier as of March 27, reducing reserves for the top soybean grower.

Soybeans for May delivery gained 0.7 percent to $14.9325 a bushel on the Chicago Board of Trade by 6:31 a.m. after earlier rising to $14.9825, the highest price for a most-active contract since June 6.

"Investors are positioning ahead of the release of the USDA report," Vanessa Tan, an analyst at Phillip Futures Pte in Singapore, said by phone today. "We have been seeing strong export demand which is the main reason for the tightening of supply for both U.S. corn and soybeans."

The USDA will reduce its forecast for corn inventories before this year’s harvest by 3.6 percent, the fifth straight cut, as demand increased after prices fell to a 40-month low in January, the Bloomberg survey showed. The USDA is scheduled to update its reserve estimates at noon in Washington today.

"The balance sheets could turn out to be tighter than expected in corn and soybeans, with the USDA report tonight," Paris-based farm adviser Agritel wrote in a market comment.


Corn, Wheat Rise


Corn for May delivery rose 0.4 percent to $5.0875 a bushel, earlier rising to $5.105, the highest since April 1.

Wheat increased 0.9 percent to $6.87 a bushel, and earlier reached $6.88, the highest since April 2. Futures climbed 14 percent so far this year after cold, dry weather hurt winter- crop prospects in the U.S., the biggest shipper, and amid concern tension between Ukraine and Russia will disrupt shipments from the Black Sea.

"The wheat crop, simply put, is off to a horrid start," economist Dennis Gartman wrote in his daily newsletter. "Drought in the hard red winter wheat-growing region of the country is the reason for the problem and that drought seems endless at this point."

Milling wheat for November delivery traded on NYSE Liffe in Paris rose 1.6 percent to 203.75 euros ($281.07) a metric ton.


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