Soybeans rose in Chicago, narrowing a second weekly drop, on speculation dryness in South America will further curb production.
The U.S. Department of Agriculture yesterday cut estimates for soybean output in Brazil and Argentina because of a drought. Global stockpiles will total 53.43 million metric tons, down 1.7 percent from a December estimate, it said. Rain will be scarce and temperatures will be high in the Pampas region of Argentina in the next week, the Buenos Aires Cereals Exchange said yesterday.
“The market is concerned about losses stemming from the weather in Argentina and Brazil,” said Sudakshina Unnikrishnan, an analyst at Barclays Capital in London. “The South American weather is calling for caution in terms of being bearish on corn and soybeans. What I’ve heard so far is that the rains have been too little, too late.”
Soybeans for March delivery gained 0.4 percent to $11.8775 a bushel by 11:29 a.m. London time on the Chicago Board of Trade. The oilseed is down 0.7 percent this week and fell 1.7 percent yesterday as the cut in the USDA’s inventory estimate was smaller than expected.
The agency lowered its soybean-production forecast for Brazil, the second-largest grower, by 1 million tons as dry weather hurt crops. It reduced the projection for third-ranking Argentina by 1.5 million tons.
“The return of La Nina weather conditions in South America leaves risks skewed to the upside this spring, especially for soybeans,” Goldman Sachs Group Inc. (GS) said in a report today.
Corn, Wheat
Corn for March delivery advanced 0.2 percent to $6.1275 a bushel. The grain is down 4.8 percent this week.
The USDA also lowered its corn-production estimate for Argentina, the second-largest exporter after the U.S., by 3 million tons from the December forecast to 26 million tons. A drought in Brazil and Argentina may have cut corn output by 11 million tons, forecaster Agroconsult said.
Wheat for March delivery gained 0.6 percent to $6.0875 a bushel. The grain is down 2.6 percent this week, set for a second drop in a row. Milling wheat for March delivery traded on NYSE Liffe in Paris gained 0.9 percent to 195.75 euros ($250.10) a ton.