Feb. 1 (Bloomberg) -- Soybeans rallied to a six-week high on speculation that warm, dry weather will erode yields in Argentina, increasing demand for tightening U.S. supplies. Corn declined.
Most of Argentina was dry the past 24 hours, and the main growing region will be warm and dry for another 10 days, T-Storm Weather LLC in Chicago said in a report. Since Dec. 20, the nation has been drier than last year, when it had a drought. The country’s oilseed production is seen as low as 47 million metric tons, 13 percent smaller than the U.S. Department of Agriculture forecast, Deutsche Bank Securities Inc. said in a report.
“The markets are reacting to the potential for smaller crops in Argentina,” David Smoldt, a vice president at INTL FCStone Inc. in West Des Moines, Iowa, said in a telephone interview.
Soybean futures for March delivery rose 0.4 percent to close at $14.7425 a bushel at 2 p.m. on the Chicago Board of Trade, after touching $14.865, the highest since Dec. 18. Prices gained 2.3 percent this week, a fourth straight gain.
Argentina’s output will trail a Jan. 11 forecast from the USDA, a unit of the agency said in a report posted on its website today.
Corn futures for March delivery declined 0.6 percent to $7.36 a bushel in Chicago, the biggest loss since Jan. 17.
Prices still rose 2.1 percent this week on speculation that China, the world’s biggest grain consumer, will increase imports to curtail rising domestic prices, Smoldt said. Futures on the Dalian Commodity Exchange are trading at a price equal to about $10.08 a bushel, data compiled by Bloomberg shows.
“Importing products that China needs helps to stabilize domestic prices,” Chen Xiwen, deputy head of the Central Rural Work Leading Group under the State Council, said at a press conference today.
Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.
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