Soybeans Rise to Nine-Month High, Corn Gains on Supply Outlook

Apr 01, 2014 4:02 pm ET

April 1 (Bloomberg) -- Soybean futures climbed to a nine- month high after inventory in the U.S., the world’s top producer, fell to the lowest in a decade. Corn extended a bull- market rally to the highest since July.

On March 1, U.S. soybean stockpiles dropped to 992.3 million bushels, the lowest for the date since 2004, while supplies stored in farm bins fell 16 percent from a year earlier to the smallest percentage of total supplies since 1977, the Department of Agriculture said yesterday. Exports to China have climbed to a record,

“We have sold China too many soybeans, and now supplies are set to be tight, perhaps the tightest ever,” Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago, said in a telephone interview. “There are not many soybeans left in farmer hands, and what’s left is not going to be easy to buy” without higher prices, he said.

Soybean futures for May delivery rose 1.4 percent to close at $14.845 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price touched $14.915, the highest for a most- active contract since June 6. The oilseed has advanced 15 percent this year.

Corn futures for May delivery rose 1.1 percent to $5.075 a bushel. Earlier, the price reached $5.125, the highest since July 17. Yesterday, the grain entered a bull market, climbing 22 percent from a closing low of $4.12 on Jan. 9.

U.S. inventories on March 1 were 7.006 billion bushels, trailing the 7.098 billion expected by analysts, the USDA said.

Cold, wet weather forecast for the next two weeks will slow planting from Louisiana to Ohio, reducing yield prospects, Grow said.

“The next focus will be U.S. planting intentions and whether or not U.S. agricultural yields will suffer from another year of adverse weather,” Deutsche Bank AG said in a report.

Wheat futures for May delivery fell 1.7 percent to $6.8525 a bushel. The grain has climbed 13 percent this year.

--With assistance from Phoebe Sedgman in Melbourne.