Forexpros – Soybean futures extended gains from the previous session on Monday, trading at the highest level since mid-September amid ongoing concerns over drought-stricken crops in Argentina and Brazil.
On the Chicago Mercantile Exchange, soybeans futures for May delivery traded at USD13.7788 a bushel during European morning trade, jumping 0.9%.
It earlier rose by as much as 1.05% to trade at USD13.7938 a bushel, the highest since September 15.
Soy prices rose more than 1% on Friday after Argentina’s Agriculture Ministry said the country’s soybean production was expected to fall to 44 million metric tons in the current marketing season, down from 49 million harvested in 2011 and 46.5 million estimated by the U.S. Department of Agriculture earlier in March.
The downward revision came after influential industry group Oil World cut its estimate for Brazil’s soy crop by 1.5 million tonnes to 66.5 million tonnes, down 12% from 75.3 million a year earlier.
The gloomy South American crop outlook fuelled speculation the USDA will further cut estimates of soybean output from Brazil and Argentina when it releases its updated global supply and demand outlook on March 30.
Last month, the USDA lowered its combined soybean production estimates for Brazil and Argentina and said that reduced South American output will boost U.S. exports by 22% to a record 42.2 million tons in the marketing year that begins in September.
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.
Prices also drew support from market talk that China bought a cargo of U.S. soybeans last week for April shipment from the Pacific Northwest.
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.
In February, U.S. farmers sold 2.923 million metric tons of the oilseed to China in the biggest one-day deal on record.
Soybean futures have rallied almost 13% since the beginning of February, including a gain of nearly 5% in March, 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.
Agricultural commodity traders were already eying the release of the USDA’s acreage projection estimates for how many acres farmers will plant with the grain on March 30.
Market talk that U.S. farmers are favoring corn plantings at the expense of soybeans is also supporting prices.
The warmest March since records began in 1971 is encouraging farmers to plant corn early, as this usually leads to higher yields.
Elsewhere on the Chicago Mercantile Exchange, wheat for May delivery added 0.25% to trade at USD6.5513 a bushel, while corn for May delivery eased up 0.05% to trade at USD6.4738 a bushel.
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