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Soybeans lead grains sliding Friday

02/22/2013 @ 3:34pm

U.S. soybean futures fell Friday, reversing course after having risen to 3 1/2-month highs earlier in the session as traders booked some profits ahead of the weekend.

Chicago Board of Trade soybeans for March delivery finished down 26 1/2 cents, or 1.8%, at $14.61 1/4 a bushel.

"After posting some big gains for the week, market participants took some money to the bank," said Tim Hannagan, grain specialist with brokerage Alpari LLC in Chicago.

Heading into trading Friday, soybean futures had risen 4% for the week and were 6% higher than the lows of last week.

The soybean market has been supported for the past few weeks by worries that strong demand is draining precariously tight U.S. stockpiles.




Many market watchers think concerns about lower Argentine production--coupled with logistical problems for Brazilian exports--will push foreign buyers to the U.S. at a time when the U.S. needs to slow demand.

The views on higher demand for U.S. soybeans were intensified this week by labor unrest at Brazilian ports, where workers are protesting new reforms planned by the government that may allow some nonunion labor and would also modernize logistics.

The U.S. faces historically tight supply levels, and any disruption in South American exports could lead to increased U.S. exports and further strain on domestic stockpiles. The U.S. Department of Agriculture has estimated U.S. supplies on Aug. 31, the end of the current soybean marketing year, will be the lowest for that time of year since 2004.

Companies that rely on soybean supplies, such as food processors and livestock companies, are counting on Brazil, the second-largest producer after the U.S., and Argentina to harvest big crops in the next few months.

Analysts said the rally in soybeans seemed to peter out once prices climbed above $15 a bushel.

"As we have seen previously, it's tough to find fresh buying once prices climb above" that level, said Rich Nelson, director of research at advisory and brokerage Allendale Inc. in McHenry, Ill. "It's very clear that the problems with South America exports is short term, and that makes it hard to keep buyers enthused at higher price levels."

U.S. corn and wheat futures ended lower, fueled by weakness from soybeans and improving moisture for parched soils across the central U.S. after a major winter storm.

March wheat futures ended down 6 1/4 cents, or 0.9%, at $7.15 a bushel at the Chicago Board of Trade. Kansas City Board of Trade March wheat dropped 7 1/2 cents, or 1%, to $7.49 3/4 a bushel. MGEX March wheat finished down 3 3/4 cents, or 0.5%, at $8.02 3/4 a bushel.

CBOT March corn ended down 1/2 cent, or 0.07%, at $6.90 1/4.


Write to Andrew Johnson Jr. at andrew.johnsonjr@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
February 22, 2013 15:40 ET (20:40 GMT)
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