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Tight stocks buoy nearby soybeans

04/24/2013 @ 9:47am

U.S. soybean futures are trading mixed Wednesday, continuing a recent trend amid worries about tightening domestic supplies of the oilseed.

Chicago Board of Trade soybeans for May delivery recently were up 3/4 cent, or 0.05%, at $14.20 1/2 a bushel. November soybeans were down 5 cents, or 0.4%, to $11.91 1/4.

Tight physical stockpiles of U.S. soybeans are supporting nearby prices as processors, foreign importers and livestock companies continue to have difficulty securing supplies.

"The market is attempting to ration the current supply of beans," said Rich Nelson, director of research at brokerage Allendale Inc. in McHenry, Ill. "The higher prices for soybeans for near-term delivery are essentially an attempt to encourage buyers to defer purchases to later dates."

The futures contract for May delivery of soybeans is trading at a 66-cents-a-bushel premium to the contract for July delivery and $2.29-a-bushel higher than the contract for November delivery.

Near-record cash basis levels--the gap between cash prices for physical soybeans and futures--for this time of year illustrate the tightness of soybean stockpiles.

"Nearby contracts are taking support from steady demand and a tight cash market," Karl Setzer, an analyst with MaxYield Cooperative in West Bend, Iowa, wrote in a morning market note.

Nearly all interest across the Corn Belt is now on field work, not selling grain or soybeans. As a result, basis values are historically high, Mr. Setzer said in the note.

"New crop" futures, or contracts that represent crops that will be harvested in the fall, continue to decline amid expectations that U.S. production will increase significantly this year. The November contract is drawing added pressure from worries farmers who are unable to plant corn because of planting delays may switch some acres to soybeans, which have a later growing season.

"It's the same story for beans," Allendale's Mr. Nelson said. "New-crop contracts continue to lose ground to nearby futures, as traders look for a substantial increase in 2013 U.S. production."

Soybean futures also have been pressured for months by large soybean harvests that are under way in Brazil and Argentina, the U.S.'s biggest rival producers.

Meanwhile, the U.S. Department of Agriculture announced the sale Wednesday of 116,000 metric tons of U.S. soybeans to unknown buyers by private exporters for delivery in the 2013-14 marketing year that begins Sept. 1.


--Write to Andrew Johnson Jr. at andrew.johnsonjr@dowjones.com.
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(END) Dow Jones Newswires
April 24, 2013 10:44 ET (14:44 GMT)
DJ Soybean Futures Mixed; Tight Supplies Buoy Nearby Contracts->copyright

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