Soyabeans hit five-month peak

US soyabean futures surged to a five-month high on Tuesday on robust demand and concerns about smaller crops in key exporters Brazil and Argentina due to adverse weather. Short covering lifted wheat for a third straight session amid strong cash prices and tight domestic stocks following stronger-than-anticipated export demand this season. "The US grain trade has been behind in reacting to the weather situation in South America," said Rich Nelson, chief strategist with consultancy Allendale Inc.
Analysts at Brazilian consultancy AgRural shaved 1.8 million tonnes off their estimate for Brazil's 2013-14 soyabean crop on Monday, saying drought in much of the country in recent weeks had reduced yields. AgRural now expects a crop of 87 million tonnes, down from 88.8 million tonnes previously and well below the US Department of Agriculture estimate for 90 million tonnes.
"After the decline in AgRural's soyabean production estimate over the weekend, we're wondering if we maybe have to start taking a bit off the expectations we've been talking about over the last couple of weeks," Nelson said. In Argentina's main soyabean-growing region, weeks of heavy rain have encouraged the spread of caterpillars that are eating into the 2013/14 season's crop yields, a climate expert said on Monday.
The less favourable conditions in South America added to concerns about tight US soyabean stocks, which have been whittled down by record-strong export demand. Cancellations of US purchases by China and switching of orders toward South American supplies have also been below expectations. The National Oilseed Processors Association said its members crushed 156.943 million bushels of soyabeans in January, below the average analyst estimate for 162.4 million.
Chicago Board of Trade March soyabeans jumped 23-1/2 cents, or 1.8 percent, to $13.61 per bushel, the highest for a spot-month contract since September 19. March soyaoil rallied 1.21 cent, or 3.1 percent, to a 2-1/2 month high of 40.36 cents per lb, the steepest spot-month percentage gain since August 26. March soyameal rose $6.90, or 1.5 percent, to $456.90 per ton.
CBOT March wheat rose 13-1/2 cents, or 2.3 percent, to a six-week peak of $6.12 a bushel, while March HRW wheat gained 11-1/4 cents, or 1.7 percent, to $6.85-3/4 a bushel. March spring wheat gained 12-3/4 cents, or 1.9 percent, to settle at $6.79-1/4 a bushel, a 2-1/2 month high. CBOT March corn added 4-1/4 cents, or 1 percent, to $4.49-1/2 a bushel.