Forexpros – Soybean futures rose for the first time in five days on Tuesday, rebounding from close to a two-week low as investors continued to monitor drought-like weather conditions in major soybean producing counties in South America, while hopes for near-term stimulus in China lent further support.
On the Chicago Mercantile Exchange, soybeans futures for March delivery traded at USD11.8050 a bushel during European morning trade, rallying 1.86%.
It earlier rose by as much as 2.45% to trade at a session high of USD11.8675 a bushel.
Prices tumbled to USD11.4975 on Friday, the lowest since December 22 after the U.S. Department of Agriculture unexpectedly raised estimates on world soybean stockpiles, easing fears over supply shortages.
Agricultural commodity markets remained closed on Monday for the Martin Luther King Jr. holiday.
Prices regained strength as agricultural meteorologists continued to forecast hot and dry weather conditions across major soybean-growing regions in Argentina and Brazil throughout the next ten days.
Brazilian weather forecaster Somar Meteorologia said Monday that soybean crops in the country’s southernmost state of Rio Grande do Sul will be harmed by further dry weather expected to linger through the end of January.
Meanwhile, the Buenos Aires Cereals Exchange offered a similar outlook, saying that a heat-wave was forecast over the next two weeks with little rain expected.
The heat of the Southern Hemisphere’s summer has been compounded by La Ni?a, a phenomenon in which tropical waters in the Pacific Ocean turn unusually cold. The La Nina weather pattern typically brings heavier rainfall in Asia and drier weather in South America.
Prices found further support after government data released earlier showed that China’s economy expanded at an annualized rate of 8.9% in the fourth quarter, slowing from the previous quarter’s 9.1% rate, but slightly better than expectations for an 8.8% increase.
While the data was better-than-expected, the nation’s economy grew at the slowest pace in more than two years and expanded less than 9% for the first time since mid-2009, fuelling speculation that Beijing was likely to ease monetary policy to stimulate growth.
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 March delivery climbed 1.35% to trade at USD6.1025 a bushel, while corn for March delivery rallied 1.55% to trade at USD6.0863 a bushel.
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