US soyabean futures jumped to a five-week high on Thursday after the Agriculture Department projected farmers will plant fewer acres than traders expected in response to falling prices. Corn futures also advanced, while wheat finished flat to lower. The US Department of Agriculture, in data released at an annual Agricultural Outlook conference, projected 2015-16 soyabean plantings at 83.5 million acres, down slightly from 83.7 million in 2014-15.
Traders were widely expecting farmers to increase soyabean plantings in an attempt to maximise earnings potential in the face of a weak corn market, and some disagreed with the USDA. "The economics still favor beans," said Terry Reilly, senior commodity analyst for Futures International in Chicago. "We think USDA is still too low on their beans and high on their corn."
Chicago Board of Trade March soyabeans closed up 1.2 percent at $10.07-1/4 a bushel, rebounding after falling 1.2 percent on Wednesday, and touched a session high of $10.17. That was the highest price for a front-month contract since January 15. The surprising decline in estimated soyabean plantings is "relatively bullish" for prices, J.P. Morgan analyst Ann Duignan said. The market has been under pressure for weeks from "a constant news flow of oversupply across major producing regions," she added. The USDA projected US corn plantings at 89 million acres, down from 90.6 million in 2014-15, and all-wheat plantings at 55.5 million acres, down from 56.8 million.
The estimates are not set in stone because farmers can adjust their plans based on changes in weather and prices. However, "in a market that is starved for fresh news, they are getting a reaction," said Karl Setzer, risk management team leader for MaxYield Co-operative in Iowa.
CBOT March corn rose 1.6 percent to $3.89-3/4 a bushel. March wheat futures was unchanged at $5.27-3/4 after falling more than 1 percent on Wednesday. Wheat prices pared earlier gains after Egypt, the world's top wheat importer, said it bought 240,000 tonnes of French and Romanian wheat in a tender and none from the United States. US wheat prices are considered too high to be competitive on the global market, and Egypt on Wednesday cancelled a tender seeking offers only from the United States. Egypt has taken steps to adjust quality rules for wheat imports that are expected to allow French grain to remain in the running for future deals.
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