Soybeans rose for the third straight session on speculation that adverse weather in South America will cut production, boosting demand for U.S. supplies. Corn was unchanged.
Hot, dry weather will continue to stress crops in Argentina, Paraguay and southern Brazil in the next six days before light rains, T-Storm Weather LLC said in a report. Precipitation will be less than normal and allow for additional soil-moisture evaporation, the forecaster said.
“Soybean production will be hurt in South America, and the U.S. is the only source for alternative supplies,” Roy Huckabay, an executive vice president at the Linn Group in Chicago, said in a telephone interview.
Soybean futures for March delivery rose 0.2 percent to close at $12.30 a bushel at 1:15 p.m. on the Chicago Board of Trade, the highest settlement for the most-active contract since Oct. 27.
South American production may fall 7.4 percent to 125.9 million metric tons this year from 135.9 million a year earlier, Huckabay said.
Corn futures for March delivery settled at $6.585 a bushel. Yesterday, the price reached $6.6425, the highest since Nov. 9. The grain jumped 6.3 percent in December as dry conditions threatened South American crops.
Output in South America may fall 8.8 percent to 76 million tons from 83.3 million, Huckabay said. Global wheat production in the year that began June 1 will rise 5.7 percent to a record 689 million tons, the U.S. Department of Agriculture said last month.
“With rising world supplies of wheat this year, overseas buyers can substitute cheaper wheat into feed rations to make up for lost corn production in South America,” he said.
Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, government data show.