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Supplies send soybeans to 8-month high

05/23/2013 @ 2:55pm

U.S. soybean futures finished higher Thursday, with the spot July contract rising to a new eight-month high on tight domestic stockpiles.

Chicago Board of Trade soybeans for July delivery, the most actively traded contract, finished up 5 1/4 cents, or 0.4%, at $14.99 1/2. The November soybean contract settled up 4 1/4 cents, or 0.3%, to $12.43.

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Futures contracts for near-term delivery led advances, a reflection of the difficulty domestic processors are still having sourcing soybeans after droughts last year in the U.S. and South America curtailed production.

"U.S. soybean domestic and export demand is still running at unsustainable levels," said Dave Marshall, grain marketing adviser for advisory firm TCFG LLC in Nashville, Ill.

"We are still seeing healthy old-crop export sales for soybeans and soy products, a signal that prices have not reached levels that are rationing demand," he said.

The U.S. Department of Agriculture reported net weekly soybean export sales of 1,022,400 metric tons, which included net sales of 183,500 metric tons for the current marketing year that ends Aug. 31. Total sales were above analysts' expectations of between 400,000 and 800,000 metric tons.

Futures rallied despite recent declines in cash prices. "We have not backed off the need for supplies by end users," Mr. Marshall said.

Market watchers said traders also were navigating through talk that several large Chinese crushers were caught holding unpriced cash basis contracts and are being forced into futures purchases by the recent dramatic rise in the market and need to have the cargos priced by June.

"Basis" refers to the gap between futures and cash prices for physical soybeans.

U.S. wheat futures settled higher Thursday, rising to one-week highs on larger-than-expected weekly export sales, worries about U.S. spring wheat planting delays and concerns about winter wheat crop conditions in the Great Plains.

Analysts said the market benefitted from traders' views that wheat's recent losses were overdone, especially with recent price declines uncovering fresh export demand. U.S. wheat prices have become competitive in world markets, analysts said.

July wheat futures ended up 14 3/4 cents, or 2.1%, at $7.03 1/4 a bushel at the CBOT. Kansas City Board of Trade July wheat rose 11 1/4 cents, or 1.5%, to $7.54 1/2 a bushel. MGEX July wheat finished up 5 1/2 cents, or 0.7%, at $8.13 1/4 a bushel.

Corn futures ended higher, climbing with wheat amid signs of solid underlying domestic demand.

CBOT corn for July delivery, the most actively traded contract, finished up 3 1/2 cents, or 0.5%, at $6.62 a bushel. The December contract settled up 4 1/4 cents, or 0.8%, to $5.34 3/4.


Write to Andrew Johnson Jr. at andrew.johnsonjr@dowjones.com
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(END) Dow Jones Newswires
May 23, 2013 15:35 ET (19:35 GMT)
DJ U.S. Soybeans Climb; Tight Supplies Push July Contract to 8-Month high->copyright


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