Soybeans rose to a two-month high on speculation stockpiles in the U.S., the world’s biggest exporter, may drop to a five-year low as global demand expands and drought damages crops in Argentina and Brazil. The U.S. Department of Agriculture may lower its forecast for soybean stocks before this year’s harvest by 8.1 percent to 170 million bushels from 185 million bushels in March, based on the average estimate of 20 analysts surveyed by Bloomberg News. Stocks were 205 million bushels ahead of the 2008 harvest. “The market appears to be bullish, as people expect the USDA to forecast a bigger decline in stockpiles for soybeans,” Tomokazu Amano, research team chief at Mitsubishi Corp. Futures & Securities Ltd. in Tokyo, said today. Soybeans for May delivery rose 16.25 cents, or 1.6 percent, to $10.2225 a bushel in electronic trading on the Chicago Board of Trade at 12:59 p.m. in Paris. The most-active contract rose to the highest level since Feb. 9 and is set for a second straight weekly gain. China, the world’s largest buyer of soybeans, bought 110,000 metric tons of soybeans from U.S. exporters for delivery before Sept. 1, the USDA said in a report yesterday. Argentina’s farm economy will contract 18.4 percent this year because of drought and farmers’ reluctance to plant crops because of government agricultural policies, Hugo Biolcati, president of the Rural Society, which represents the country’s largest farmers, said yesterday. Argentina’s soybean production may drop to 39.4 million tons this year from 46.4 million tons last year, Buenos Aires- based newspaper Clarin said, citing the Buenos Aires Cereals Exchange. Exports may fall to $14 billion from $24 billion last year, the newspaper said. Corn for May delivery rose 0.8 percent to $4.0025 a bushel. Wheat for May delivery added 0.9 percent to $5.3675 a bushel. Euronext milling-wheat for May delivery was unchanged at 136.25 euros a metric ton at 1:32 p.m. in Paris.

Source