Forexpros – Soybean futures swung between small gains and losses on Wednesday, but remained close to a one-month high as traders focused on short-term weather forecasts for Brazil and Argentina, the world’s second and third largest soy producers.
On the Chicago Mercantile Exchange, soybean futures for January delivery traded at USD11.4538 a bushel during European morning trade, easing up 0.1%.
The January contract traded between a range of USD11.4112 a bushel, the daily low and USD11.4838, the session’s high. Prices rose to a one-month high of USD11.4925 a bushel on Tuesday.
Forecasts showed rainfall was expected across major soybean-growing regions in Southern Brazilian and Eastern Argentina through Thursday, providing short-term relief to stressed crops.
However, adverse weather was expected to return to the region next week, according to agricultural meteorologists.
Industry weather group Telvent DTN said Tuesday that scattered showers will filter into soybean-growing areas in Argentina during the next few days, which will help ease stress to developing crops, but more rain was needed.
South America is the main competition for U.S. exporters and a smaller crop outlook there would likely mean greater demand for U.S. soybeans.
Soybean prices have advanced in seven of the past eight trading sessions, gaining nearly 5% as dry weather in Argentina and Brazil fuelled concerns over crop conditions in the South American countries.
Traders have been focusing on crop prospects in Southern Hemisphere countries in recent sessions, as most Northern Hemisphere corn crops have been harvested by now.
Meanwhile, the European Central Bank said that it allotted EUR489.2 billion to 523 European lenders in its first offer of three-year loans earlier in the day, exceeding expectations for a total amount of EUR391 billion.
Risk aversion sharpened following the announcement, as the scale of the operation indicated that European lenders believe that funding shortages are likely to continue into 2012.
Elsewhere on the Chicago Mercantile Exchange, corn for March delivery shed 0.25% to trade at USD6.0550 a bushel, while wheat for March delivery slumped 0.35% to trade at USD6.0475 a bushel.
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