Forexpros – Soybean futures regained strength on Thursday, trading below an eight-month high hit earlier in the week as a round of profit taking ebbed amid ongoing concerns over crop conditions in South America.
On the Chicago Mercantile Exchange, soybeans futures for May delivery traded at USD14.2575 a bushel during European morning trade, gaining 0.25%.
It earlier rose by as much as 0.7% to trade at a session high of USD14.2863 a bushel. Prices climbed to USD14.5125 a bushel on Tuesday, April 10, which was the highest level since August 31.
In its Supply & Demand Estimate Report published Tuesday, the U.S. Department of Agriculture lowered its estimate on U.S. ending stocks of the oilseed by 9.1% to 250 million bushels.
The downward revision reflected an increase to U.S. soybean exports. The agency pegged exports for the 2011-12 season at 1.29 billion bushels, up 15 million from its March forecast.
The USDA expected global soybean supplies to total 55.52 million tons in the current marketing season, down 1.78 million tonnes from March.
Combined output in Brazil, the second-largest grower, and Argentina, the third-biggest, will drop 11% from last season to 111 million metric tons, the lowest in three years, the USDA said.
According to the USDA, the average price of U.S. soy in 2011-12 was projected to range from USD12.00 to USD12.50 a bushel, compared with a range of USD11.40 to USD12.60 a bushel projected in March.
Brazil and Argentina are major soy exporters and compete with the U.S. for business on the global market. Downbeat South American crop prospects could increase demand for U.S. supplies.
Soybean prices have rallied nearly 22% since the beginning of December, and are up almost 17% since February, as market sentiment has been dominated by concerns over distressed crops in major South American soy growers and on hopes demand from top consumer China will remain robust in the near-term.
But prices have been under pressure in the past two sessions as market players and large institutional investors liquidated long positions to lock in gains from the strong rally.
Soy traders were now shifting their focus to Friday’s release of Chinese gross domestic product figures. Official Chinese trade data released earlier in the week revealed demand for the oilseed remains strong.
China’s imports of soybeans rose in March to 4.83 million tonnes, higher than February imports of 3.83 million and up a whopping 21.6% from the previous year. In the first quarter, shipments totaled 13.33 million tons.
China is the world’s largest soybean consumer and is expected to account for nearly 60% of global trade of the grain in the 2011-12 season, according to the U.S. Department of Agriculture.
Elsewhere on the Chicago Mercantile Exchange, wheat for May delivery added 0.25% to trade at USD6.2975 a bushel, while corn for May delivery eased up 0.2% to trade at USD6.3713 a bushel.
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