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Soybeans surge ahead of USDA data

08/12/2013 @ 10:14am

U.S. soybean futures are higher Monday morning, amid strong export demand and continued concern among market participants about dryer-than-expected conditions in major soybean producing regions.

Traders are also adjusting positions ahead of a report in which the government is expected to cut its supply forecast for the year's soybean harvest.

Soybeans for August delivery, thinly traded ahead of the contract's expiration Wednesday, are up 9 3/4 cents, or 0.7%, at $13.50 1/4 a bushel at the Chicago Board of Trade.

The U.S. Department of Agriculture on Monday morning said private exporters reported export sales of 853,000 metric tons of soybeans for delivery to China and unknown destinations in the next marketing year, which will start Sept. 1. That was the fifth largest report of daily soybean sales, establishing for some traders that world demand for the U.S. crop remains strong ahead of the upcoming harvest.

Traders are also bracing for the U.S. Department of Agriculture to issue a monthly supply-and-demand report including updated forecasts for the sizes of this year's soy, corn and wheat harvests, at noon EDT Monday.

Analysts on average expect the agency to cut its forecast for U.S. soybean output this year by 2.5% to 3.336 billion bushels. Analysts also expect a reduction in the USDA's forecast for soybean stockpiles at the end of the next U.S. crop year.

Weather conditions for U.S. soy crops have largely been favorable this summer, leading soybean prices to fall sharply in recent weeks.

But analysts still expect a smaller harvest than previously forecast by the USDA, leading some traders to worry current prices are too low to account for the risk of a smaller crop.

Soybeans also are underpinned by worries about dry soil in parts of the western Corn Belt, though weather overall remains favorable.

The NWS's extended outlooks continue to predict below-average temperatures in most of the Farm Belt over the next two weeks.

The NWS's six- to 10-day outlook predicts above-average chances of rain in the western and southern Farm Belt, but below-average chances of rain in the western Great Lakes region. Its eight- to 14-day outlook is wet for most of the Farm Belt, but predicts only average chances of rain in parts of Nebraska, Iowa, Missouri and Kansas.

"Roughly 20-25% of the Corn Belt is going to be in need of some moisture pretty soon" said Mark Schultz, chief analyst for Northstar Commodity, a Minneapolis brokerage.

Write to Kelsey Gee at kelsey.gee@dowjones.com
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(END) Dow Jones Newswires
August 12, 2013 10:48 ET (14:48 GMT)
DJ U.S. Soybeans Rise Ahead of USDA Report; Strong Exports->copyright

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