Soybeans soar on stressful forecast
U.S. soybean futures are surging on concerns about how hot, dry weather will affect the crop and tight near-term supplies.
Chicago Board of Trade September soybeans were recently up 40 1/2 cents, or 3%, to $13.62 1/2 a bushel. The rally in soybeans is helping support corn. September corn was recently up 10 cents, or 2.1%, to $4.97 3/4.
The market is rebounding from sharp Thursday losses as traders turn their attention from better-than-expected rains this week to the near-term forecast, which is calling for hot, dry weather across the Midwest over the next 10 days. That is problematic for crops that have already seen too little rain this season.
"It's our feeling that the soybean crop could be in trouble," Standard Grain president Joe Vaclavik said in a report to customers.
The impact of the dry weather has previously been mitigated somewhat by unseasonably cool summer temperatures. Many traders are particularly worried about the U.S. soybean crop.
Meanwhile near-term supplies are very tight, as stockpiles of last year's drought-plagued crop have dwindled and this year's harvest is still weeks away in the heart of the corn belt.
Traders say reports from the Pro Farmer Midwest crop tour, which concluded Thursday, have heightened fears about the soybean crop. Scouts found low bean-pod counts across many areas of the tour. Pro Farmer will release national yield estimates Friday at 2:30 p.m. CT.
But some analysts say that while the soybean crop is facing legitimate risks, some favorable late-season weather, and a delayed first frost of the season, would still lead to a strong crop in many areas.
"Traders should keep in mind that these are soybeans, and quick recoveries from far more dire conditions have occurred, last year being a perfect example," said Sterling Smith, a futures specialist with Citi in Chicago, in a report to customers.
Technical buying as the November contract has surged to a fresh two-month high has added to soybeans' rally Friday, but traders note the market also has strong overhead resistance.
Traders are also worried about the corn crop, but with historically high acreage this year, a record crop is likely even if the national average yield fails to set a record. Large stockpiles are expected once the fall harvest arrives.
Both the corn and soybean crops, which were planted late and have developed slowly because of cool temperatures, are at risk of yield loss in areas that see an early frost, analysts said.
Wheat futures were also higher Friday. September Chicago Board of Trade wheat futures were recently up 5 cents to $6.35 1/2 a bushel.
Write to Ian Berry at firstname.lastname@example.org
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(END) Dow Jones Newswires
August 23, 2013 11:01 ET (15:01 GMT)
DJ U.S. Soybean Futures Soar as Heat Forecast Adds to Crop Worries->copyright