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Soybeans bounce late, force mixed close

10/23/2012 @ 3:34pm

U.S. soybean futures ended higher Tuesday, recovering from early losses, as strong underlying demand for the crop offset pressure from slumping outside markets.

Chicago Board of Trade soybeans for November delivery settled up 6 3/4 cents or 0.4% at $15.53 1/4 a bushel.

November soybeans traded as low as $15.29 a bushel by mid-morning, but then rebounded as the low prices attracted buyers.

Grain and soybean futures were buffeted by a broader move away from risk across markets ranging from equities to precious metals. Declines were prompted by renewed concerns about U.S. and world economic growth.

But for soybeans, the uncertainty surrounding an already fragile balance between tight U.S. supplies and strong demand gave investors enough confidence to buy futures at lower price levels.

The U.S. is basically the only game in town for global soy supplies at the moment, a strong underpinning influence for prices, said Arlan Suderman, senior market analyst with advisory firm Water Street Solutions in Wichita, Kan.

The U.S. is buoyed by strong export demand, led by China, the world's largest soybean importer.

Still, advances in soybean futures Tuesday were limited by the possibility that U.S. forecasters may again raise their estimates for this fall's harvest in a monthly report due Nov. 9, said Anne Frick, senior oilseed analyst with Jefferies Bache in New York. Futures also are under pressure from expectations that Brazil and Argentina, two major soybean producers, will harvest record crops next spring, she said. Planting is under way in the two countries.

Soybean futures jumped to all-time highs in early September, as a severe drought hammered the U.S. Farm Belt. But prices have fallen about 13% from the record intraday high, in part because yields from the soybean harvest are not as poor as once feared.

Wheat futures finished lower Tuesday, unable to escape the widespread weakness in world stock markets and in many commodities. Wheat had traded higher for four straight days.

Wheat also fell on concerns about weak export demand for the U.S. grain, with traders saying export business needs to pick up for U.S. wheat exports to catch up with the pace projected by the federal government.

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