Soybeans Advance on Supply Concern Over Argentina Freeze

(Bloomberg) – Soybeans rose to a three-year high in Chicago and rapeseed reached the highest in 15 months in Paris on mounting concern that a freeze in South America and rain in Europe will curb oilseed supplies.

Areas of Argentina saw “a light to hard freeze”yesterday, leaving soybeans at risk of damage, Telvent DTN said in a report. Oil World, a research company based in Hamburg, cut its forecast for the country’s crop yesterday, saying production may drop as much as 15 percent from a year earlier. In the European Union, the world’s biggest rapeseed producer, cool, rainy conditions have slowed crop development, Telvent DTN said.

“It looks like there’s going to be a bit of a shortage in the supply of oilseeds in the next 12 months,” said Dave Norris, an independent grain broker in Harrogate, England. “The market is gearing up to have a very, very scary ride across the summertime.”

Soybeans for July delivery rose 2 percent to $14.9375 a bushel on the Chicago Board of Trade by 1:14 p.m. in London. Prices reached $14.9675 earlier, the highest since July 2008.

Argentina’s government said last week that the soybean harvest was 41 percent complete, compared with 52 percent a year earlier. The country is the world’s third-biggest soybean exporter after Brazil and the U.S.

Rapeseed for May delivery rose 1.2 percent to 513.50 euros ($678.49) a ton on NYSE Liffe in Paris, after touching 514 euros, the highest since January 2011. The EU’s Monitoring Agricultural Resources unit cut its estimate for the 27-nation bloc’s yields on April 23, citing cold weather in February.

Corn for delivery in July rose 1 percent to $6.14 a bushel. Wheat for July delivery climbed 0.9 percent to $6.38 a bushel inChicago. In Paris, November-delivery milling wheat rose 0.3 percent to 202.5 euros a ton.

Corn dropped and cattle futures plunged yesterday on speculation demand for feed will weaken after a case of Bovine Spongiform Encephalopathy, also known as mad-cow disease, was found in California. Cattle rebounded today after Japan and Taiwan said they wouldn’t alter import controls on U.S. beef.

To contact the reporter on this story: Whitney McFerron in London at wmcferron1@bloomberg.net; Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net.

To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net