Feb. 4 (Bloomberg) -- Soybeans reached a seven-week high on speculation that warm, dry weather will reduce yield potential in Argentina, boosting demand for U.S. supplies. Corn fell on slowing export demand and reduced ethanol output.
Light rain provided limited relief to less than 30 percent of the Argentina growing region in the past three days, and dry, warm weather during the next week will increase crop stress on about 40 percent of the fields from central Argentina to Paraguay, Commodity Weather Group LLC said in a report today. Soybeans inspected for export jumped 32 percent in the week ended Jan. 31 to the highest since the week ended Nov. 15.
“The Argentina weather continues to provide support,” Gregg Hunt, a market analyst at Archer Financial Services Inc. in Chicago, said in a telephone interview. “Exports continue to be much stronger than people expected, because the weather concerns have encouraged buyers to ship supplies rather than cancel and buy cheaper beans from South America.”
Soybean futures for March delivery gained 1 percent to close at $14.8875 a bushel at 2 p.m. on the Chicago Board of Trade, after touching $14.98, the highest since Dec. 17.
This year’s soybean harvest in Argentina may be 52.9 million metric tons, according to the average of estimates of 23 analysts in a Bloomberg survey. That’s less than the 54 million forecast by the U.S. Department of Agriculture, which will update its estimates on Feb. 8.
Corn prices fell after the government said U.S. grain inspected for export plunged to the lowest since July 2003 during the week ended Jan. 31, Hunt said. U.S. production of ethanol, made mostly from corn, fell 2.8 percent to an average of 770,000 barrels a day in the week ended Jan. 25, the lowest since the Energy Department began collecting weekly data in June 2010, the government agency said last week.
In Chicago, corn futures for March delivery slid 0.2 percent to $7.3425 a bushel.
Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.
--Editors: Thomas Galatola, Millie Munshi