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Soybeans rise to 4-month highs

03/05/2013 @ 3:07pm

U.S. soybean futures rose for the second straight session Tuesday, settling at their highest level in nearly four months amid strong export demand for the oilseed.

Chicago Board of Trade soybeans for March delivery finished up 6 1/4 cents, or 0.4%, at $14.96 1/2 a bushel, while the May contract rose 4 1/2 cents, or 0.3%, to $14.66 1/2.

Soybean gains were bolstered by continued strength in demand from foreign markets, as the pace of U.S. export sales raises concerns that tight U.S. supplies will be further squeezed.

The U.S. Department of Agriculture on Tuesday reported fresh export sales of 330,000 metric tons of soybeans to unknown buyers for the 2012-13 marketing year, which ends Aug. 31, and 345,000 metric tons to China for delivery in the 2013-14 marketing year that begins Sept. 1.

The news gave a spark to soybean futures, said Bill Nelson, an analyst with Doane Advisory Services in St. Louis.

"It's unusual to be into the month of March and still have such a large old crop sale," Mr. Nelson said, referring to sales of supplies harvested last fall. "Furthermore, the sales are a reflection of the steady roll of export sales in seven of the last nine trading days."

The export sales reinforce perceptions among traders that global buyers, particularly China, are looking to the U.S. for soybeans due to logistical problems for Brazil's exports.

"As long as China keeps calling on the U.S. for supplies, it diminishes how much we will have available later down the road," Mr. Nelson said.

While Brazilian farmers are harvesting a huge crop this year, logistical problems are causing loading and shipping delays, limiting what the nation is able to export. Brazil is expected to surpass the U.S. this year as the world's largest soybean producer.

The U.S. already faces historically tight supply levels. The U.S. government has estimated that domestic stockpiles on Aug. 31, the end of the current soybean marketing year, will be the lowest for that time of year since 2004.

Traders are also gearing up for Friday's crop reports, in which the USDA is expected to highlight a tight U.S. supply situation for soybeans. The USDA will release its latest report on world supply and demand Friday at noon EST.

Corn and wheat futures ended higher with soybeans, with corn futures supported by tight near term supplies and solid demand from domestic processors, livestock feeders and ethanol plants.

CBOT May corn ended up 5 3/4 cents, or 0.8%, at $7.09.

May wheat futures ended up 3 1/2 cents, or 0.5%, at $7.06 a bushel at the Chicago Board of Trade. Kansas City Board of Trade May wheat rose 7 cents, or 0.9%, to $7.45 a bushel. MGEX May wheat finished up 3 1/2 cents, or 0.4%, at $7.95 3/4 a bushel.

Write to Andrew Johnson Jr. at
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March 05, 2013 15:49 ET (20:49 GMT)
DJ UPDATE: U.S. Soybeans Settle Near 4-Month High on Strong Demand->copyright

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