Soybeans hit 8-month top as rains delay Argentina’s harvest

Soy-Beans

U.S. soybean futures climbed to an eight-month peak on Monday, rising for a sixth session out of seven, with heavy rains in Argentina raising fears of crop damage. Wheat gained 1 percent, while corn was little changed after a four-session rally which was triggered by worries about summer weather risk in the U.S. Midwest and dry conditions in Brazil.

Chicago Board of Trade most-active soybean contract gained 0.6 percent at $9.61-1/2 a bushel by 0323 GMT. Earlier in the session, it jumped to 9.64, the highest since August. Wheat was at $4.64-1/4 a bushel and corn was at $3.78-1/2 a bushel. “We are certainly seeing weather concerns in Argentina,” said Phin Ziebell, agribusiness economist at National Australia Bank in Sydney.

“There could be additional demand for U.S. beans as South American exporters had been quite aggressive in soybean exports with currency depreciation in Brazil and reduction in Argentina’s export taxes.” Last week, Argentina’s Rosario grains exchange left its soy crop forecast unchanged at 59 million tonnes, saying it would take time to gauge the damage from rains. Soybeans are also drawing support from higher domestic demand in the United States.

The U.S. National Oilseed Processors Association said its members crushed 156.690 million bushels of soybeans in March, the second-biggest on record for the third month. The figure was up from 146.181 million crushed in February and just above an average of trade estimates.

Recent gains in corn have been driven by dryness in Brazil and forecasts for the emergence of the La Nina weather event.

Brazil’s winter corn crop is being stressed by dry conditions. The Commodity Weather Group said in a note to clients that “minimal rains over the next 10 days allow stress to expand to nearly half of the belt”.

The U.S. Climate Prediction Center has forecast an increasing chance of La Nina in the second half of the year. Its arrival could raise the risk of hotter and drier weather in the Midwest corn belt.

Commodity funds bought an estimated net 15,000 CBOT corn contracts on Friday, trade sources said. The funds also were net buyers of 10,000 soybean contracts and 1,000 wheat contracts, traders said.

[reuters]

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