Grain futures advanced on Tuesday, soybeans touched the strongest level in almost three weeks, amid expectation dry weather conditions in Brazil, the global largest exporter of the grain, may harm some developing crops.
On the Chicago Board of Trade, soybeans futures for settlement in March rose by 0.8% to trade at $13.0338 per bushel by 15:53 GMT. Prices touched a session high at $13.0488 per bushel, the strongest since January 21st, while day’s low stood at $12.9112 per bushel. The oilseed settled last month 0.45% lower, after it lost 8.5% in 2013.
“Brazilian harvest pressure is hanging over the oilseed market, however, the recent dry spell has raised some yield concerns for those crops which are still immature,” said today Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, cited by Bloomberg.
According to a report by Safras & Mercado, Brazilian soybeans harvest almost doubled, from 2.9% last week to 5.7% this week. Estimates by the same company showed that the soybeans output in the country may reach a record 91.8 million tons.
DTN.com reported on February 4th that the dry and hot pattern in the Brazilian soybeans areas will probably continue at least during the next seven days, depleting soil moisture and increasing crop stress. The dry weather will be beneficial for early harvesting in the northernmost corn and soybeans areas, with an exception of the Sao Paolo area, where filling crops may be affected by drought.
Meanwhile, the website reported that pollinating corn and developing soybeans in central Argentina, will be favored by episodes of showers and thunderstorms during the next seven days. However, the website reports that storms will be so strong, that some local flooding is expected.
Elsewhere on the grains market, corn futures for March delivery rose by 0.69% to trade at $4.3863 a bushel by 15:48 GMT. Futures hit a session high at $4.3938 per bushel, the strongest level since December 11th, while day’s low was touched at $4.3462 per bushel.
The grain increased 3.05% last month, marking the first monthly advance since May. Corn lost nearly 40% in 2013, the steepest annual drop on record amid expectations the global output will surge to 966.9 million tons in 2013-2014 season, boosted by record production in the US, the world’s top producer.
Wheat up as well
On the Chicago Board of Trade, wheat futures for settlement in March added 1.32% to trade at $5.7163 per bushel by 15:52 GMT. Prices jumped to a session high of $5.7188 per bushel, while day’s bottom was touched at $5.6212. On January 29th, prices touched $5.5075 per bushel, the weakest since July 14th 2010, to settle the week 2% lower.
Wheat slumped 22% last year, marking the largest annual decline since 2008, on expectations for a record global output of 712.7 million tons, according to data by the US Department of Agriculture.
DTN’s February 4th forecast called for more below-normal temperatures during the next week over the Midwest. Damage to soft red winter wheat will probably be limited by additional snowfall in the region. However, some areas which will receive ice rather than snow, may experience some potential damage to the winter wheat crop.
Meanwhile, according to the website, the Southern Plains north and central wheat growing areas will experience well-below normal temperatures during the week. Temperatures may drop below zero Fahrenheit, but the snow cover will probably insulate the crop.
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