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Demand keeps soybeans rising

11/01/2012 @ 3:01pm

U.S. soybean futures rose Thursday, fueled by robust demand and strong cash markets.

Futures extended the week's rebound from recent losses, as firmed-up U.S. cash markets attracted new buying. Cash markets are being driven by high demand amid tight supplies of the oilseed.

Advances on Thursday were also boosted by the robust pace of U.S. soybean exports.

Chicago Board of Trade soybeans for November delivery settled up 11 1/2 cents, or 0.7%, at $15.58 1/2 a bushel. Soybeans for January delivery finished up 11 1/4 cents, or 0.7%, at $15.60.

"Traders' focus is back to export demand and concerns about the uncertainties of South American crop potential," said John Kleist, senior analyst with E-BOTTrading.com in Lakemoor, Ill.

Soybean buyers such as China, the world's largest soybean importer, are soaking up U.S. supplies amid the absence of available global inventories until South American farmers start harvesting their crops early next year.

South America is counted on to produce record crops in 2013 to alleviate the strain on already precariously low projected U.S. inventories. With a tight U.S. supply forecast, traders are developing a deepening concern about a less-than-ideal start to the planting season in Brazil and Argentina, the largest producers of soybeans after the U.S.

"If there is any real or apparent problem for South American crops, the market reacts accordingly," Mr. Kleist said. "South American production is very undetermined at this point, encouraging traders to factor in risk."

Meanwhile, strong cash markets are helping to propel soybean futures, amid an unwillingness by some farmers to market supplies as the U.S. harvest winds down. The slow movement of the oilseed is forcing companies that export soybeans from the U.S. to boost the price they will pay as they try to meet strong demand from foreign importers.

Exporters at the Louisiana Gulf are paying 87 cents to 88 cents a bushel above November futures for near-term delivery of soybeans.

U.S. wheat futures also climbed Thursday, buoyed by global supply worries and dry conditions in the U.S. southern Plains.

Traders pointed to lower-than-expected production in other big wheat-producing countries, such as Russia and Ukraine, as a potential driver of higher export demand for the U.S. crop. The U.S. is the world's largest exporter of wheat.

Futures drew additional strength from lower-than-expected ratings of the U.S. winter-wheat crop Wednesday from government analysts.

December wheat futures ended up 4 cents, or 0.5%, to $8.68 1/2 a bushel at the Chicago Board of Trade. Kansas City Board of Trade December wheat rose 4 1/2 cents, or 0.5%, to $9.08 1/2 a bushel. MGEX December wheat finished up 1 1/4 cents, or 0.1%, at $9.43 1/4 a bushel.

U.S. corn futures ended lower, unable to sustain earlier gains in the face of slumping demand. Exports of the U.S. crop have been lackluster, and ethanol producers and some livestock companies have curbed purchases after corn prices jumped to record highs over the summer.

Corn futures dropped 0.6%, with the December contract settling down 4 3/4 cents to $7.51 a bushel.

Write to Andrew Johnson Jr. at andrew.johnsonjr@dowjones.com.
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(END) Dow Jones Newswires
November 01, 2012 15:55 ET (19:55 GMT)
DJ US GRAIN AND SOY REVIEW: Beans Rise Amid Strong Demand->copyright

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