Soybeans Gain on U.S. Acreage Speculation, South America Drought

By Luzi Ann Javier - Mar 28, 2012
Source : Bloomberg
Soybeans advanced before a U.S. government report this week that may show planting for the next season will not increase and as drought curbed the harvest in South America, dimming global supply prospects.

The May-delivery contract rose as much as 0.7 percent to $13.79 a bushel on the Chicago Board of Trade and was at $13.7675 at 1:27 p.m. in Singapore, paring yesterday’s 0.7 percent drop. Futures are set for a 14 percent gain this quarter.

The U.S. soybean acreage estimates are expected to show no change from last season’s 75 million acres (30 million hectares), Rabobank International said in a report yesterday. The U.S. Department of Agriculture is scheduled to release the results of a national survey of farmers’ planting intentions and the government’s estimates of grain inventories on March 30.

“Concerns about the yields in South America and the report that’s coming out on Friday about plantings are pushing prices higher,” Chung Yang Ker, an analyst Phillip Futures Pte., said by phone from Singapore.

Prices may average $14 a bushel in the second quarter, as the extent of the dry weather in South America has yet to be fully realized, Rabobank said in the report, raising the forecast from last month’s $12.90 a bushel. So far this quarter, the oilseed has averaged $12.7175.

“The recent price rally in soybeans may have come too late for U.S. farmers as field preparations, seed purchases and crop rotations may have already been decided,” said Rabobank. Growers in the U.S., also the largest corn grower and exporter, typically buy most of the seeds needed to sow the grain and soybeans by Jan. 1, Dan Cekander, director for grain research at Newedge USA LLC, said in an interview earlier this month.

U.S. Exports

U.S. exporters sold 120,000 metric tons of soybeans to China for the year beginning Sept. 1, the USDA said yesterday.

Stronger exports of soybeans and corn, and higher use of the grain in ethanol production, will push U.S. stockpiles lower, Goldman Sachs Group Inc. said in a report e-mailed today.

Corn for May delivery gained 0.2 percent to $6.3225 a bushel, while wheat for delivery in the same month rose 0.4 percent to $6.4225 a bushel.

The U.S. corn planting will probably rise to 94.658 million acres, the most since 1944, according to a Bloomberg survey. Sowing will rise from 91.921 million acres last year and the USDA’s estimate of 94 million acres last month. Stockpiles probably dropped 5.6 percent from a year earlier to 6.16 billion bushels as of March 1, according to a separate Bloomberg survey.