Thursday 17 January 2013

Soybeans Drop From 3-Week High on Rising South American Supplies

By Phoebe Sedgman - Jan 17, 2013
Bloomberg
Soybeans declined from the highest price in three weeks as forecasts of increased production in South America outweighed estimates of improving demand for U.S. supplies. Corn was little changed.

Soybeans for March delivery fell as much as 0.5 percent to $14.30 a bushel on the Chicago Board of Trade and were at $14.32 by 1:13 p.m. Singapore time. The most-active contract earlier advanced to $14.415, the highest level since Dec. 26. The oilseed is heading for a 4.2 percent gain this week.

Production in Brazil, set to overtake the U.S. as the largest exporter, may be higher than estimated last month after recent rainfall, researcher Oil World said Jan. 15. The U.S. Department of Agriculture raised its outlook for Brazil’s crop on Jan. 11 to 82.5 million metric tons. While drier weather in Argentina in the two weeks to Jan. 10 aided planting, the total area planted in summer crops may still be about 1 million hectares (2.47 million acres) below farmers’ original intentions because of flooding in some areas, Oil World said.

“We look to be consolidating some of the very strong gains,” said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia. “We have seen very strong export sales out of the U.S. into China and that pace suggests that there might be a stronger-than-expected drawdown.”

U.S. export sales may have climbed to 450,000 tons to 1.1 million tons in the week ended Jan. 10, from 321,803 tons a week earlier, a survey of four analysts by Bloomberg News shows.

Crushers in China, the world’s biggest buyer, boosted purchases to 30 cargoes from the U.S. or South America last week, the equivalent of about 1.8 million tons, according to the median of estimates from five crushers and one researcher compiled by Bloomberg. That compares with a usual weekly average of 10 cargoes to 20 cargoes, respondents said.

Corn for March delivery was little changed at $7.3175 a bushel after gaining as much as 0.3 percent. Prices advanced for an eighth straight session yesterday, the longest rally since December 2011, and reached $7.35, the highest since Dec. 10.

Wheat for March was little changed at $7.84 a bushel.

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