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Soybeans up on planting, inventory worries

03/23/2012 @ 3:47pm

U.S. soybean futures closed higher Friday, boosted by concerns that U.S. soy plantings could be roughly flat compared to a year earlier and inventories may be tighter than previously expected.

Soybeans for May delivery ended up 16 1/4 cents at $13.65 3/4 a bushel at the Chicago Board of Trade. May soymeal rose $2.90 to $373 a short ton, and May soyoil ended up 0.92 cent at 54.88 cents a pound.

Traders are bracing for the U.S. Department of Agriculture next Friday to release reports on U.S. planting acreage and inventories, which could cause swings in agricultural futures prices. Expectations that the USDA's forecasts could be low--and a need for higher prices to attract farmers to plant more soybeans--helped drive up prices Friday.

"You have people expecting a lot of corn acres and no real increase in soybeans, so they're trying to be more friendly to the beans," said Sid Love, analyst with Kropf and Love Consulting in Overland Park, Kan.

Soybean futures also continued to draw support from expectations for a smaller South American soy crop due to drought. Argentina's government on Thursday cut its soy crop forecast, raising concern about tighter world inventories this year.

Analysts say lower output in Argentina and Brazil could drive more demand for soybean exports to the U.S., tightening U.S. domestic inventories as well. Soy prices have risen for most of the year on concerns about South America's crop and expectations for growing export demand.

Outside markets also boosted soy futures, with crude oil higher and the dollar lower on Friday.

Soybean prices remained below a six-month high close set last Friday. But soy prices could hit fresh highs if signs of strong Chinese demand reemerge, countering concerns that grew this week about slowing economic growth in China, said Doane Advisory Services analyst Bill Nelson.

Still, some market participants are hesitant to take large positions ahead of the USDA reports next week, limiting potential further gains for soy early next week.

Meanwhile, corn futures ended higher, fueled by speculative buying tied to a weaker dollar and spillover support from strong gains in soybean futures. CBOT May corn ended up 2 cents at $6.46 1/2 a bushel.

Wheat futures ended higher, with CBOT wheat settling at a one-week high. Prices were boosted by speculative short-covering ahead of the weekend and the USDA crop reports, analysts said. Spring wheat futures garnered additional support from concerns farmers may opt to plant corn at the expense of wheat in the Northern Plains, analysts said.

CBOT May wheat ended up 8 cents at $6.54 1/4 a bushel. May wheat finished up 10 1/4 cents at $8.17 1/4 a bushel at the MGEX in Minneapolis, and May wheat at the Kansas City Board of Trade ended up 10 1/2 cents at $6.94 1/2 a bushel.

-By Owen Fletcher, Dow Jones Newswires; 312-750-4120; owen.fletcher@dowjones.com
(Andrew Johnson Jr. contributed to this article.)
(END) Dow Jones Newswires
March 23, 2012 16:21 ET (20:21 GMT)
DJ US GRAIN AND SOY REVIEW: Soy Up On Planting, Inventory Worries->copyright

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