Forexpros – Soybean futures extended gains from the previous session on Monday, climbing to a three-day high as market sentiment continued to be dominated by developments surrounding Italy’s debt crisis.
On the Chicago Mercantile Exchange, soybean futures for January delivery traded at USD11.8475 a bushel during European early afternoon trade, jumping 0.8%.
It earlier rose by as much as 1.2% to trade at USD11.9288 a bushel, the highest price since November 9.
Agricultural commodities continued to be affected by outside influences after Italy’s Treasury auctioned EUR3 billion of five-year government bonds at an average yield of 6.29% earlier in the day, compared to a yield of 5.32% in a previous sale last month.
While the yield surged to a euro-lifetime high it was still below 6.35%, the level seen in the secondary market ahead of the sale.
The auction, which was viewed as a key test of investor confidence in Italian debt, was the first after former European Commissioner Mario Monti was appointed to head a new government charged with implementing urgent reforms.
Soybean prices found further support after Zhu Min, deputy managing director at the International Monetary Fund said over the weekend that China’s economy was heading towards a “soft landing”.
Separately, Chinese Premier Hu Jintao said that China will “focus more on increasing imports while maintaining a stable level of exports”, in part to help stimulate economies around the world.
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 USDA.
Despite the gain in prices, soybean futures remained vulnerable in the near-term, as the prospect of a strong Brazilian soybean harvest was likely to pressure prices.
On Friday, Goldman Sachs lowered its estimate for average soybean prices to USD12.2000 a bushel, down 3.2% from a previous projection, citing “improving prospects” in South America. Brazil is the world’s second largest exporter of the grain, trailing only the U.S.
Elsewhere on the Chicago Mercantile Exchange, corn for December delivery eased down 0.13% to trade at USD6.3838 a bushel, while wheat for December delivery shed 0.38% to trade at USD6.1488 a bushel.
Later in the day, the U.S. Department of Agriculture was to publish its weekly crop progress report, which will provide an indication on how U.S. crops fared over the past week.
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