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Soybeans jump on more Argentina rain

12/05/2012 @ 3:14pm

U.S. soybean futures jumped Wednesday amid strong export demand and concerns about unfavorable weather for soy planting in parts of Argentina.

Futures settled at their highest levels in 3 1/2 weeks. Chicago Board of Trade soybeans for January delivery finished up 23 3/4 cents, or 1.6%, at $14.79 1/4.

Futures extended the market's 2 1/2-week recovery from November lows, driven by high demand amid tight supplies of the oilseed and worries about planting delays in Argentina, the world's third-largest soybean producer.

Soybeans got a lift on widespread rumors among traders that China had secured purchases of U.S. supplies overnight.

Market participants are shifting their focus back to the fundamental factors that have underpinned soybean futures for months, said Don Roose, president of Iowa-based brokerage U.S. Commodities Inc.

Soybeans enjoy strong domestic and export demand, as long as weather continues to threaten plantings in Argentina, traders feel justified in boosting prices, Mr. Roose said.

Companies that rely on soybean supplies, such as food processors and livestock companies, are counting on Brazil, the world's No. 2 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.

"Disappointing weather conditions during South American planting create risks that harvest and exports are delayed, pushing U.S. stocks lower and prices sharply higher," Goldman Sachs Group said in a research note Wednesday.

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

Futures also drew support Wednesday from technically based buying, with managed-fund purchases accelerating advances as buyers were encouraged by the positive technical signals from January futures surpassing their 200-day moving average.

Wheat futures gained modestly, supported by hopes for greater export demand and concerns about threats to world production. Traders are optimistic about increased demand as U.S. wheat has become more competitive in world markets.

Corn futures ended higher, taking support from higher soy prices, but remained confined within recent trading ranges. Lackluster domestic and export demands limit traders' willingness to push corn prices higher, analysts said.

March wheat futures ended up 3 1/2 cents, or 0.4%, to $8.60 a bushel at the CBOT. Kansas City Board of Trade March wheat rose 5 1/4 cents, or 0.6%, to $9.07 3/4 a bushel. MGEX March wheat finished up 3 cents, or 0.3%, at $9.32 1/4 a bushel.

CBOT March corn ended up 5 3/4 cents, or 0.8%, to $7.57 3/4.

Write to Andrew Johnson Jr. at andrew.johnsonjr@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
December 05, 2012 15:54 ET (20:54 GMT)
DJ U.S. GRAIN AND SOY REVIEW: Soybeans Jump Higher on Demand, Argentine Weather

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