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Tight supplies boost soybeans

Updated: 04/18/2013 @ 3:49pm

U.S. soybean futures rose for the third straight session Thursday, settling at their highest level in three weeks amid strong demand for tight stockpiles of the oilseed.

Chicago Board of Trade soybeans for May delivery settled up 8 1/4 cents, or 0.6%, at $14.30 1/2 a bushel. November soybeans finished up 5 1/2 cents, or 0.5%, to $12.23 1/2.

Soybeans are continuing to bounce back from prior week's declines, bolstered by strength in demand from both foreign importers and domestic processors. The pace of export sales and domestic processing is raising concerns that tight U.S. supplies will be further squeezed.

"We are seeing a push from buyers on the nearby May contract, as the market is taking on the task of rationing demand for the limited availability of soybean inventories," said John Kleist, senior analyst with brokerage in Lakemoor, Ill.

The tightness of domestic soybean stockpiles is reflected in near-record cash basis levels--the gap between cash prices for physical soybeans and futures--for this time of year.

Basis bids continue to firm up, as buyers who need supplies are being forced to pay a premium for it.

The rise in soybean contracts for near-term delivery is likely tied to ongoing logistics problems in South America that have resulted in soybean shipment delays from the region. The delays have spurred larger-than-expected demand from foreign importers for U.S. soybeans and soymeal over the near term.

The U.S. Department of Agriculture reported weekly export sales of 566,800 metric tons, which included 339,400 metric tons for the current marketing year that ends Aug. 31, and weekly sales of soymeal that reached 266,000 metric tons.

Market watchers said the sales confirm that the U.S. still has strong demand for soybeans and soymeal.

Corn futures ended lower, backpedaling from prior gains. Corn is pressured by easing cash basis levels amid fresh farmer selling and by current rains replenishing soil moisture across the Midwest, Mr. Kleist said.

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