May 20 (Bloomberg) -- Soybeans advanced to a nine-week high as farmers in the U.S. Midwest withheld dwindling supplies from last year’s drought-reduced harvest. Wheat also rose, while corn dropped.
Processors in Decatur, Illinois, paid a premium for soybeans this month that averaged $1.1675 a bushel more than July futures, up from 13.25 cents during all of May 2012, data compiled by Bloomberg show. Since Oct. 1, exports of soybean oil are more than double the year-earlier total, while sales of soybean meal to foreign buyers are up 33 percent, the U.S. Department of Agriculture said May 16. U.S. soybean inventories as a percentage of use on Aug. 31 will be the lowest ever.
“The cash market is leading the rally in futures because demand is stronger than people expected,” Brian Grete, the senior market analyst for the Professional Farmers of America newsletter in Cedar Falls, Iowa, said in a telephone interview. “Exporter and processor demand for soybeans and products continues to exceed supplies that farmers are willing to sell.”
Soybean futures for July delivery rose 1.1 percent to close at $14.645 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $14.66, the highest for a most-active contract since March 13. Soybean-meal futures for July delivery surged 2.4 percent to $435.30 per 2,000 pounds, the third straight gain and the highest close since March 12.
The U.S. was the world’s largest soybean exporter last year and ranked second in production, behind Brazil, according to the USDA.
Wheat futures for delivery in July rose 0.3 percent to $6.8525 a bushel on the CBOT, the first gain in four sessions.
Farmers in the U.S., the world’s largest exporter of the grain, may have delayed spring-wheat sowing to concentrate on planting corn and soybeans, which promise better returns, said Jerry Gidel, the chief feed-grain analyst for Rice Dairy LLC in Chicago.
In the U.S., 43 percent of spring-wheat crop in the main growing regions was sown by May 12, behind the five-year average pace of 63 percent, USDA data show. Spring-wheat planting in the top six producing states probably will be less than 60 percent when USDA releases its weekly report at 4 p.m. in Washington, Gidel said.
Corn futures fell on speculation that U.S. farmers accelerated planting with dry, warm weather last week, and that rain and warm temperatures this week will aid quick plant germination and early growth, Grete said.
Wet, cold weather in recent weeks left 28 percent of the crop sown as of May 12, the lowest for that time of year since at least 1980, USDA said last week. USDA probably will say corn planting jumped to 66 percent completed in today’s update, Pro Farmer’s Grete said.
Corn futures for delivery in July fell 0.5 percent to close at $6.495 a bushel in Chicago. The grain climbed 2.6 percent last week.
To contact the reporter on this story: Jeff Wilson in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Steve Stroth at email@example.com