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Beans rise on exports, tight supplies

Updated: 02/28/2013 @ 4:35pm

U.S. soybean futures rose Thursday, boosted by new signs of strong export demand and tight supplies.

Chicago Board of Trade March soybean futures settled up 16 3/4 cents, or 1.1%, at $14.74 1/4 a bushel.

Signs of continued robust export demand boosted soybeans. The U.S. Department of Agriculture on Thursday reported fresh sales of 123,000 metric tons of soybeans to China for the 2013-14 marketing year, which starts Sept. 1. The sales came on the heels of 240,000 metric tons of sales announced Wednesday, half to China and half to unknown buyers.

Also Thursday, the USDA reported net export sales of 1.171 million metric tons of soybeans made in the week through Feb. 21, including 689,000 metric tons for delivery in the current marketing year. Total sales exceeded analysts' expectations of between 525,000 and 925,000 tons.

The recent surge in export sales has been prompted partly by logistical problems in Brazil, analysts say. Although the country is poised to overtake the U.S. as the world's biggest soybean producer this year, the huge crop has taxed the country's infrastructure, analysts said, making it difficult to export in a timely fashion.

"We're seeing robust export sales continue, and we expect that to continue until at least mid-March, until South America comes fully online" with newly harvested supplies, said Terry Reilly, senior commodity analyst for Futures International, a Chicago brokerage.

Soybean prices also rose on worries about tight supplies, after no market participants on Thursday announced an intention to deliver soybeans against a futures-market position. Thursday was first-notice day for March futures, or the first day on which notices of delivery intentions could be received.

Analysts widely had expected low to zero delivery intentions for soybeans Thursday, but the confirmation added to concerns about tight supplies. Low delivery intentions are seen as a sign that commodity owners believe their supplies are worth more than reflected by current prices, so they prefer to hold on to their inventories.

Soybeans also rose on technical buying. March futures surpassed their 200-day moving average Thursday, attracting renewed buying by speculative traders.

Corn futures rose on a lack of announced delivery intentions, reflecting tight supplies.

March corn rose 10 cents, or 1.4%, to $7.19 1/2 a bushel.

Wheat futures rose on hopes for improved U.S. export demand, amid an uptick in world export business for the grain. Technical buying also boosted wheat, as some analysts say sharp recent price declines have been overdone.

CBOT March wheat rose 3 1/2 cents, or 0.5%, to $7.07 3/4 a bushel. KCBT March wheat rose 12 3/4 cents, or 1.7%, to $7.47 a bushel. MGEX March wheat rose 12 1/2 cents, or 1.6%, to $7.99 3/4 a bushel.

--Ian Berry contributed to this article.

Write to Owen Fletcher at owen.fletcher@dowjones.com

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