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Soybeans rise ahead of expected USDA cuts

12/09/2013 @ 1:03pm

Soybeans gained on speculation that the U.S. Department of Agriculture will reduce its domestic stockpiles estimate in a report on Tuesday amid increased global demand. Corn and wheat futures also rose.

The USDA will probably forecast inventories on Aug. 31 at 159 million bushels, according to a survey of analysts by The Wall Street Journal. That's down from the government's November forecast of 170 million bushels, but still up from last year's 141 million.

Corn stockpiles are expected to be forecast at 1.861 billion bushels, less than the 1.887 billion projected in last month's USDA supply-and-demand report, but still more than double last year's 824 million bushels. Wheat inventories will probably be estimated at 553 million bushels, below the 565 million forecast last month, according to market watchers.

"This report is setting up to be a little friendly" for prices, said Jason Britt, the president of Central States Commodities Inc. in Kansas City, Mo. "It looks like they have the ball teed up for this one to be bullish."

Soybean futures for January delivery gained 14 1/2 cents, or 1.1%, to $13.40 a bushel on the Chicago Board of Trade.

While the USDA may lower its forecast for stockpiles in Tuesday's report, it may increase its production estimate in a January report, Mr. Britt said. That, along with what's expected to be a record crop in Brazil, the world's biggest exporter of the oilseeds, may put a cap on prices, he said. China, which has been a big buyer of U.S. soybeans so far this year, might cancel some purchases of U.S. crops once Brazil growers begin harvesting.

"China is going to play their game--they're going to book and book and book and once they are assured that South America has a crop they're going to come in and cancel," Mr. Britt said.

Corn futures for December delivery on the CBOT rose 2 1/4 cents, or 0.5%, to $4.26 1/4 a bushel on the CBOT.

Wheat futures for December delivery gained 2 1/2 cents, or 0.4%, to $6.39 3/4 a bushel in Chicago.

Write to Tony Dreibus at tony.dreibus@wsj.com
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(END) Dow Jones Newswires
December 09, 2013 10:40 ET (15:40 GMT)
DJ Soybeans Rise as USDA Seen Lowering Stockpiles Estimate; Corn Gains->copyright

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