Feb. 28 (Bloomberg) -- Soybeans advanced to the highest level in more than five months after rainfall in Brazil, poised to be the largest shipper, came too late to aid parched crops and global stockpiles may shrink the most in 16 years.
Soybean and corn-growing areas in Brazil will get rain this week, slowing the harvest, forecaster Somar Meteorologia said yesterday. Hot, dry weather damaged Brazil’s crops during the growing season, Telvent DTN Inc. said in a report yesterday. Rabobank International said on Feb. 20 prices will average $12.81 a bushel in the first quarter. So far, the average is about $12.30 a bushel.
“South America’s production shortfall and strong U.S. export demand” are driving prices higher, said Erin FitzPatrick, a London-based analyst at Rabobank. The bank’s price forecasts “are a bit higher on the outlook for China’s imports. That latest forecast implied higher prices.”
Soybean futures for May delivery gained 0.3 percent to $13.06 a bushel by 10:16 a.m. London time on the Chicago Board of Trade, after earlier touching $13.1175 a bushel, the highest price since Sept. 22. A close higher would be the seventh straight gain, the longest winning streak this year.
Exporters in the U.S., the biggest grower, had agreed to sell 19.2 million metric tons of soybeans to China as of Feb. 16, for shipment in the year through Aug. 31, including the 16.2 million tons that they already exported, the U.S. Department of Agriculture said Feb. 24. Total sales for this marketing year rose from 18.7 million tons a week earlier, it showed.
“There’s been that ongoing concern around the drought conditions in South America and on top of that you’ve got fairly strong demand for oilseeds coming out of China,” Michael Creed, an agribusiness economist at National Australia Bank Ltd., said by phone from Melbourne today. “The market has clearly tightened and has become a lot more bullish the past few days.”
Corn for May delivery was little changed at $6.4775 a bushel in Chicago.
Wheat for delivery in May also was little changed at $6.4775 a bushel. Milling wheat for delivery in the same month was unchanged at 190.75 euros ($256.35) a ton on NYSE Liffe in Paris.
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