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Grains - Soybean futures re-approach 7-week high

Published 02/05/2013, 05:57 AM
Investing.com - U.S. grain futures were mostly higher during European morning hours on Tuesday, with soybean prices re-approaching the previous session’s seven-week high amid ongoing concerns over crop conditions in Argentina.

On the Chicago Mercantile Exchange, soybeans futures for March delivery traded at USD14.9312 a bushel, up 0.3% on the day. The March contract rose by as much as 0.4% earlier in the day to hit a session high of USD14.9400 a bushel.

Soy prices rallied to USD14.9787 a bushel on Monday, the strongest level since December 18, as market players continued to monitor weather forecasts and crop conditions in Argentina.

Industry weather group DTN said Monday that another extended period of dry weather with hot temperatures was forecast to descend across key grain-growing regions in Argentina.

However, the firm added that there is a chance for a few showers developing in the southwest part of the country and spreading northeast during the weekend.

Argentina is a major soybean exporter and competes with the U.S. for business on the global market. Lower crop prospects in the South American country could increase demand for U.S. supplies.

Indications that demand from top consumer China will remain robust in the near-term also lent support to prices.

The U.S. Department of Agriculture said Monday that private exporters sold 116,000 metric tons of soybeans for delivery to China. It was the fifth time in two weeks that the USDA reported new sales of U.S. soybeans to China.

China is the world’s largest soybean consumer, accounting for nearly 60% of global trade of the grain in the 2011-12 season.

Meanwhile, corn futures for March delivery traded at USD7.3388 a bushel, little changed on the day. The March contract held in a tight trading range between USD7.3138 a bushel, the daily low and a session high of USD7.3488 a bushel.

Corn prices remained supported as investors continue to closely monitor corn crop prospects in South America.

Elsewhere, wheat for March delivery traded at USD7.6250 a bushel, nearly flat on the day. The March contract was stuck in a range between USD7.6238 a bushel, the session low and a daily high of USD7.6625 a bushel.

Wheat prices slumped to USD7.6112 a bushel on Monday, the weakest level since January 11, after the U.S. Department of Agriculture reported lower-than-expected wheat export sales for the previous week.

Wheat traders continued to monitor weather forecasts for key parts of Kansas and Texas, where prolonged dryness threatens now-dormant winter wheat crops. Kansas is the largest U.S. wheat grower while Texas is the fourth-largest.

Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay.

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