soyabeans futures at the Chicago Board of Trade rallied 1 percent on Tuesday on active seeding of the US corn crop that led to ideas for fewer soya acres this year, traders said. A declining dollar and a rally in the Brazilian real to above the $2.00 level for the first time in six years.
It also gave a lift to the soya complex as did renewed weather worries in the United States and China. "They're talking about possible dryness here and the China drought is getting worse," a trader said. CBOT soya closed 4 to 10 cents per bushel higher, with July up 7-1/2 at $7.78 per bushel.
"Strength in the real was bullish for beans and drought is creeping into the eastern Midwest," said Dan Cekander, analyst for FIMAT USA. Active seediness of the corn and soyabeans crops last week weighed on each market in the day but now traders are turning their attention to the potential for hot and dry weather in the Midwest this summer.
The El Nino weather phenomenon has been giving the US Midwest good growing weather for several years. There are now signs of a switch to a La Nina pattern, which could lead to hot and dry weather this summer in key US crop areas.
There were some weather reports on Tuesday hinting at dryness in the Midwest, which could harm crops at a time that big production is needed to meet the growing demand from the green fuels sector mainly corn for ethanol and soyaoil for bodiless.
DTN Meteorlogix forecaster Joel Burg said on Tuesday the eastern Corn Belt has been drying out and may stay dry over the next 10-days or so. Additionally, worsening drought in portions of China, including China's key Henna grain growing province, added to the bullish momentum for grain and soyabeans futures on Tuesday, the traders said.
China's Xinhua news agency said on Tuesday that rainfall in Henna province since March has been down 70 percent on the average for the last two years, with no significant rain expected this month. The soyabeans supply in the United States currently is at record-high levels but expectations for fewer soya acres this year and continued brisk demand for soya are expected to shrink soya stocks by next year.
USDA last on Friday forecast the new-crop US soyabeans ending stocks at half the current marketing year total and a further reduction in plantings might result in further declines in soya ending stocks. Soyameal closed $2.10 per ton higher to 70 lower, with July up $1.70 at $208.20. Soyaoil was 0.10 to 0.25 cent per lb. higher, with July up 0.11 at 34.60.
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