Chicago soyabeanbean futures rose about 1 percent on Monday, extending last weeks rally, which lifted the market to a 2-1/2 month high, as a report predicted lower closing stocks in the United States on strong global demand. But corn and wheat dropped half a percent each, following a slide in crude oil, which influences grain prices because of their growing use in making biofuels.
"The soyabean market is really strong, its a good buying opportunity," said Kaname Gokon, a manager with broker Okato Shoji Co in Tokyo. "We have a price forecast of $10.50 a bushel by the end of this week for the May contract." Chicago Board of Trade soyabean for May delivery rose nearly 1 percent, or 9-3/4 cents, to $10.16-3/4 per bushel by 0340 GMT, after touching $10.30-3/4 per bushel in the previous session, its highest since January 26.
The US Department of Agriculture in its April supply and demand report on Thursday said the soyabeanbean carryout or ending stocks for the marketing year to August 31 would be 165 million bushels (4.49 million tonnes), below the previous forecast for 185 million bushels (5.03 million tonnes). If so, this would be the smallest soyabeanbean supply in five years.
On top of this, a severe drought is likely to cut soyabeanbean production in South Americas big three producers, Brazil, Argentina and Paraguay. The drought and farmer unrest in Argentina have led China to increase its purchases of US and Brazilian soyabeanbeans. The USDA also trimmed its forecast of Argentinas soyabean crop for this year to 39.0 million tonnes, down from the previous 43.0 million.
A decline in global soyabean supplies comes at time when importers, led by China, have stepped up imports. China bought 3.86 million tonnes of soyabeanbeans in March, a rise of 66.6 percent from a year earlier and the second highest monthly tally, according to official Customs figures. The most-active January contract on Chinas Dalian soyabeanbean market rose 1.6 percent following gains in Chicago.
CBOT May delivery corn fell 2 cents to $3.88-1/4 and wheat for May delivery was also down 2 cents at $5.20 per bushel. Oil prices slid on Monday, eroding strong gains late last week after the International Energy Agencys dramatic oil demand downgrade overshadowed data showing Chinese crude imports rose to their second-highest ever.