Soybean meal climbed to an 18-month high on speculation rains and floods that reduced the Argentine crop have also hurt quality.
Concern that crop quality has deteriorated in Argentina has spurred buyers to seek alternative supplies, said Masayo Kondo, president of Commodity Intelligence, a researcher in Tokyo. The soybean crop in Argentina, the world’s largest exporter of meal made from the oilseed, will be 5 million metric tons smaller than a year earlier, Oil World estimates.
"Uncertainty over the extent of Argentine crop losses, in terms of both quality and quantity, continues to feed into higher prices," Tobin Gorey, a strategist at Commonwealth Bank of Australia, said in a report e-mailed Thursday.
Soybean meal for July delivery rose as much as 2.3 percent to $416.40 per 2,000 pounds on the Chicago Board of Trade and were at $416.30 by 11:21 a.m. London time. Prices have surged 24 percent this month, the most since October 2014. They jumped almost as much in April.
The gains helped drag July soybean futures as much as 0.8 percent to $10.9425 a bushel, the highest in almost two years.
Argentina will harvest 55 million metric tons of soybeans this season, down from 60 million a year earlier, Oil World forecasts. That’s deepening a global oilseed shortage the Hamburg-based researcher predicts will total 3.6 million tons in 2015-16. A smaller crop in Argentina means the world will become more reliant on U.S. supplies starting July.
Increased reliance on the U.S. crop comes just as a fading El Nino and possibility of La Nina weather pattern emerging brings jitters to the market. A La Nina could hurt oilseed crops, according to Jens Naervig Pedersen, an analyst at Danske Bank, who has recommended hedging against the weather pattern.
In other markets:
- Corn for July gained 0.6 percent to $4.07 a bushel in Chicago, while wheat for the same month climbed 1.2 percent to $4.715 a bushel.
- In Paris, milling wheat for December rose 0.6 percent to 170 euros ($190) a ton on Euronext.