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Tight supplies bounce soybean futures

06/25/2013 @ 3:12pm

U.S. soybean futures closed at a two-week high Tuesday, supported by strong demand for tight domestic stockpiles of the oilseed and lagging planting progress.

Chicago Board of Trade soybeans for July delivery finished up 13 1/4 cents, or 0.9%, at $15.25 1/4 a bushel. The November soybean contract settled up 5 cents, or 0.4%, to $12.78 1/2.

The outlook is for soy supplies to remain tight through the summer, with planting delays pushing back the availability of new supplies from domestic harvests until later in autumn supporting prices.

"Soybeans are still facing a very tight supply situation in the face of strong domestic demand," said Mike Zuzolo, president of Global Commodity Analytics and Consulting in Lafayette, Ind.

"There is good demand for soymeal, a byproduct of soybeans, and buyers continue to push for available bean supplies reflective of historically high prices for physical supply of soybeans for this time of year."

A tight supply situation has buoyed soybean prices for months since droughts last year in the three major producers of soybeans, the U.S., Brazil and Argentina shrunk available stockpiles from last year's harvests.

Traders are also concerned about a lagging U.S. soybean planting pace.

U.S. soybean growers are slowly nearing the completion of 2013 seedings, having planted 92% of the crop as of Sunday, up from 85% a week ago but below the five-year average of 95%, the U.S. Department of Agriculture said in a report Monday.

"The fact there are still roughly 5.4 million unplanted acres in the U.S., and their seeding is becoming questionable is providing strength to soybean prices." said Karl Setzer, analyst with MaxYield Cooperative in West Bend, IA.

"The late plantings bring into question what the crops yield and production potential will be," Mr. Zuzolo said. "The crops will be susceptible to heat and dryness stress later in the season."

U.S. corn futures ended mixed, with tight supplies buoying contracts for near term delivery. "New crop" futures such as the December contract that represents crops to be harvested in autumn finished lower amid favorable weather outlooks for developing crops across the U.S. Farm Belt.

CBOT corn for July delivery finished up 3 1/2 cents, or 0.5%, at $6.56 3/4 a bushel. The December contract settled down 2 cents, or 0.4%, to $5.44 1/2.

U.S. wheat futures finished mixed, with most contracts pressured by an advancing U.S. harvest that will bring fresh supplies to the marketplace.

July wheat futures ended down 3 1/4 cents, or 0.5%, at $6.75 3/4 a bushel at the Chicago Board of Trade. Kansas City Board of Trade July wheat dropped 11 cents, or 1.5%, to $7.04 1/4 a bushel. MGEX July wheat finished down 2 cents, or 0.2%, at $8.09 1/4 a bushel.


Write to Andrew Johnson Jr. at andrew.johnsonjr@dowjones.com.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
June 25, 2013 14:58 ET (18:58 GMT)
DJ US Soybeans Close at 2-Week High on Tight Supplies->copyright


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