Soybeans reach 6-week high
Chicago Board of Trade March soybeans settled up 27 cents or 1.9% at $14.78 3/4 a bushel, the highest settlement for the front-month contract since Dec. 17.
With world supplies of soybeans and corn tight after a severe drought battered U.S. crops last year, buyers are looking to large expected harvests in Brazil and Argentina this year to replenish stockpiles.
A drier weather pattern emerged in Argentina earlier this month to threaten those hopes. Traders had expected rainfall on Friday and Saturday this week to help ease the growing concerns about dryness in the country, but updated forecasts on Wednesday showed lower predicted rainfall this weekend and over the next two weeks in Argentina.
"South America has been the principal focus of the soybean trading over the last two weeks," said Bill Nelson, an analyst with Doane Advisory Services in St. Louis. "The market has been acutely aware of changes in the forecast."
The U.S. Department of Agriculture currently forecasts Argentina this season will harvest 54 million metric tons of soybeans. But if current forecasts for two weeks of relatively dry weather turn out to be correct, Argentina's likely production could fall 4% to about 52 million tons, Mr. Nelson said.
Farther north, traders are concerned that heavy rain in the next several days could delay soybean harvesting in parts of Brazil.
Port congestion in Brazil is also raising hopes that foreign buyers of soybeans will turn instead to the U.S. for purchases.
For technical traders, soybeans became more attractive after March futures overnight surpassed $14.60 3/4 a bushel, their intraday high from earlier in the month.
March soybeans on Wednesday settled just below their 100-day moving average of $14.80 a bushel, another level of technical resistance.
Corn futures rose on the drier forecasts for Argentina and on the higher prices for soybeans, which are more threatened than corn by the changes in South American weather. Technical buying also supported corn after March futures moved above their $7.35 intraday high from earlier in the month.
March corn rose 10 3/4 cents or 1.5% to $7.40 1/4 a bushel, a seven-week high.
Wheat futures were pulled higher by the gains in soybeans and corn. Wheat was also underpinned by the risk from prolonged drought conditions to winter wheat crops in the southern Plains.
CBOT March wheat rose 10 cents or 1.3% to $7.87 a bushel. KCBT March wheat rose 10 cents or 1.2% to $8.40 3/4 a bushel. MGEX March wheat rose 8 cents or 0.9% to $8.69 a bushel.
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(END) Dow Jones Newswires
January 30, 2013 15:36 ET (20:36 GMT)