Soybeans, poised for the biggest monthly advance since 2010 in Chicago, rose to a five-month high on signs of a second year of global shortage as South American crops wilt amid a drought.
The oilseed has gained 9.6 percent in February, the most since December 2010. Dry weather in South America has slashed output and inventories are forecast by Jefferies Bache LLC to drop 20 percent from the prior year. Oilseed stockpiles will reach a three-year low of 74.1 million metric tons in the 2011-12 season, researcher Oil World said yesterday.
“The dry weather in South America and the view that yields are going down are starting to gather some momentum,” Neil Burgess, a Sydney-based analyst at Westpac Banking Corp., said by e-mail. “The focus is turning to U.S. supplies and export demand from China.”
Soybeans for May delivery climbed 0.2 percent to $13.145 a bushel by 1:15 p.m. London time on the Chicago Board of Trade. Prices touched $13.15, the highest level for a most-active contract since Sept. 22. A gain today would be the longest winning streak since the eight sessions through Dec. 27.
Wheat for May delivery added 0.7 percent to $6.7275 a bushel. The grain is poised to rise for a fourth month in five. Hedge-fund managers and other large speculators may make purchases to cover short positions, or bets on a decline, as higher soybean futures buoy wheat prices.
Speculative short positions in wheat outnumbered long positions by 56,672 contracts in Chicago as of Feb. 21, Commodity Futures Trading Commission figures showed. The dryness in South America is supporting oilseed and grain prices.
“It’s the age-old excuse for any rally, but with the size of the shorts in wheat, the move higher by beans is causing people to short-cover,” said Christopher Gadd, an analyst at Macquarie Bank Ltd. in London. “Wheat looks as if it’s going to get more bearish as we get into the second quarter and see the return of Black Sea wheat.”
Milling wheat for May delivery traded on NYSE Liffe in Paris gained 1.2 percent to 208.25 euros ($280.45) a ton.
Corn for May delivery added 0.2 percent to $6.585 a bushel in Chicago, set for an eighth climb in nine sessions. The grain is up 3.1 percent this month.