(Reuters) – U.S. soybean futures rose for a fourth consecutive session on Wednesday, with the market trading near its highest since late July on concerns over dry weather reducing yields in Argentina, the world’s third-largest supplier.
The most active soybean contract on the Chicago Board of Trade was up 0.5 percent at $10.13-1/2 a bushel by 1043 GMT, edging up towards Tuesday’s peak of $10.15, which was the highest since July 28.
“The price is profiting from the dry weather in Argentina….Only half of the expected acreage has been planted, which is significantly less than at this time last year. The lack of moisture is also fuelling fears of reduced yields,” Commerzbank said in a market note.
Dealers said the declaration of a La Nina weather event, which can bring dry weather to parts of South America, helped to heighten concern about crop outlook.
“It is still too early to make any definite predictions about the effects, especially since all the climate models suggest that La Niña will be short and mild,” the bank said.
The uncertainty surrounding Argentine crop prospects fuelled hopes that China, the world’s biggest soybean importer, might start booking more U.S. soy cargoes. Sales of U.S. soybeans in the 2017-18 marketing year that started Sept. 1 have lagged the pace set at the same time last year.
“The market is trying to build a weather premium but we feel it is bit too early to get worried about Argentina’s soybean crop.” said one India-based commodity analyst at an international bank.
CBOT corn prices rose 0.3 percent to $3.54-3/4 a bushel, also supported by a diminished crop outlook in South America.
Private analytics firm Informa Economics cut its estimate of Brazil’s 2017/18 soybean and corn crops, trade sources said.
Informa put 2017/18 Brazil soybean production at 110 million tonnes, down 1 million from its previous estimate, and put 2017/18 all-corn production at 89 million tonnes, down 3 million from a previous forecast.
U.S. wheat prices were lower with the market weakened partly by sluggish exports.
Cheaper wheat supplies from the Black Sea region are giving stiff competition to U.S. exporters.
Russia still expects to export 45 million tonnes of grain in the 2017/18 marketing year which started on July 1, Russian Agriculture Minister Alexander Tkachev said in an interview with Rossiya 24 TV on Wednesday.
His forecast includes 35 million tonnes of wheat.
Grain lobby Coceral also on Wednesday raised its forecast for EU 2017 soft wheat production.
The most active CBOT wheat contract was down 0.2 percent at $4.31-3/4 a bushel while March milling wheat on Paris-based Euronext fell 0.3 percent to 161 euros a tonne.
