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Exports send soybeans up, corn down

12/06/2012 @ 2:59pm

Government reports on weekly export sales produced mixed reactions for U.S. corn and soybean futures Thursday.

Higher-than-expected sales propelled soybean futures to fresh four-week highs, while lower-than-expected sales for corn pushed that market lower.

Soybeans rose 0.8%, and have rallied $1 a bushel in the past week on rumors of large Chinese purchases.

"This was just confirmation of the talk of big sales," said Bill Nelson, analyst with advisory firm Doane Advisory Services in St. Louis, Mo.



The sales were a reminder that robust export demand for U.S. soybeans is likely to continue to underpin futures.

Soybean buyers such as China, the world's largest soybean importer, are expected to continue soaking up U.S. supplies until soybean harvests in South America begin a few months from now.

The U.S. Department of Agriculture reported net export sales of 1.14 million metric tons of soybeans in the week ended Nov. 29. The sales were above traders' expectations for sales in a range of 400,000 to 700,000 tons, according to a poll.

The stellar export sales more than offset a larger soy-production estimate for Brazil. Conab, the Brazilian equivalent of the USDA, estimated the 2013 Brazilian soybean crop at a record large 82.6 million metric tons Thursday, with the range of production 80.1 million to 83 million tons assuming normal weather conditions. The USDA last month estimated Brazil production at 81 million metric tons.

Companies that rely on soybean supplies, such as food processors and livestock companies, are counting on Brazil, the world's second-largest producer after the U.S., and Argentina to produce record crops to relieve the strain of tight global supplies. The countries will harvest their crops in the first half of next year.

Chicago Board of Trade soybeans for January delivery finished up 12 cents, or 0.8%, at $14.91 1/4.

Conversely, corn futures stumbled on the government's export report. "The corn sales were just plain bad," said Tim Hannagan, grain specialist with brokerage Alpari LLC in Chicago.

Corn prices dropped after the USDA reported net weekly corn export sales of just 47,400 metric tons. The sales fell below last week's total, which was also lackluster at 263,500 metric tons, and were far shy of analyst estimates of 300,000 to 500,000 tons.

The sales reflected the reluctance of foreign importers to buy U.S. corn at historically high prices for the grain, and marked the second weekly report in a row that drove futures lower.

CBOT March corn ended down 6 1/4 cents, or 0.8%, to $7.51 1/2.

Wheat futures finished higher, rebounding from early declines, as traders covered early bets that prices would decline, reducing risk ahead of the close.

March wheat futures ended up two cents, or 0.2%, to $8.62 a bushel at the Chicago Board of Trade. Kansas City Board of Trade March wheat rose 4 1/4 cents, or 0.5%, to $9.12 a bushel. MGEX March wheat finished up 3 cents, or 0.3%, at $9.35 1/4 a bushel.


Write to Andrew Johnson Jr. at andrew.johnsonjr@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
December 06, 2012 15:52 ET (20:52 GMT)
DJ U.S. GRAIN AND SOY REVIEW: Soy Futures Jump on Exports; Corn Falls->copyright


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