Forexpros – Soybean futures rose on Monday, trading close to a seven-day high as adverse weather forecasts fuelled concerns over crop conditions in Brazil, while hopes that European leaders will boost efforts to tackle the region’s debt crisis lent further support.
On the Chicago Mercantile Exchange, soybean futures for January delivery traded at USD11.4350 a bushel during European morning trade, climbing 0.62%.
It earlier rose by as much as 0.75% to trade at USD11.4488 a bushel, the highest since November 30, when prices hit USD11.4550.
Soybean futures were boosted after agricultural meteorologists forecast mostly dry weather across Brazil’s largest soybean-producing region of Mato Grasso through December 9.
The lack of rain could potentially threaten yields and reduce the quality of the country’s soybean harvest, which up until now had been boosted by favorable weather conditions.
Brazil is the world’s second largest soybean producer and the third biggest exporter of the grain. Soybean futures fell almost 6.5% in November, pressured by large South American crop prospects and increased competition for U.S. exports from countries in the Black Sea region.
Meanwhile, agricultural traders continued to monitor developments surrounding the ongoing debt crisis in the euro zone.
Italy unveiled a EUR30 billion package of austerity measures on Sunday aimed at reducing the country’s debt load, the second largest in the single currency bloc.
Later in the day, French President Nicolas Sarkozy and German Chancellor Angela Merkel were to meet in Paris. The two leaders were expected to resume discussions on joint proposals for more coercive budget discipline in the single currency bloc, ahead of Friday’s European Union summit.
Mild dollar weakness also contributed to gains, with the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, retreating 0.2% to trade at 78.59.
A weaker dollar boosts the appeal of U.S. crops to overseas buyers and makes commodities more attractive as an alternative investment.
Elsewhere on the Chicago Mercantile Exchange, corn for March delivery edged 0.35% higher to trade at USD5.9713 a bushel, while wheat for March delivery dipped 0.22% to trade at USD6.2400 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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