BLBG: Soybeans Advance on Speculation Dry Weather May Hurt Latin American Crops
Soybeans advanced for a second day as dry weather threatens crops in South America, raising concern Brazil may face a repeat of a 2005 drought that damaged crops.
January-delivery soybeans gained as much as 2.1 percent to $12.465 a bushel on the Chicago Board of Trade before trading at $12.3125 at 1:34 p.m. Singapore time.
Weather patterns indicate soybean-growing regions in Argentina will be drier and hotter than normal, while Brazil could turn drier in the seven days through Nov. 28, Telvent DTN Inc. said in a forecast yesterday. Brazil and Argentina are the world’s largest soybean shippers after the U.S.
“The global supply of soybeans remains very tight, so any crop problems in Argentina and Brazil would more than likely have a bullish effect on prices,” Ker Chung Yang, an analyst at Phillip Futures Pte., said in Singapore.
Brazil soybean and corn farmers may face a drought similar to the one that damaged 13 percent of its grain and oilseed crops five years ago, said Expedito Rebello, head of research at the government’s Meteorology Institute.
The southern part of Brazil has received below-average rain since October because of a La Nina weather pattern, raising concern that crops being planted now will be damaged before next year’s harvest, Rebello said. Brazil is the world’s second- largest soybean shipper and third-largest corn exporter.
The southern states of Parana, Santa Catarina and Rio Grande do Sul account for 41 percent of Brazil’s corn output and 37 percent of its soybeans.
Corn for March delivery declined 0.2 percent to $5.28 a bushel in Chicago, reversing a 0.9 percent advance. Corn output in Argentina may drop to 5 percent to 10 percent less than the average over the past five years because of dry weather in January, Bethesda, Maryland-based Commodity Weather Group LLC said yesterday.
March-delivery wheat gained as much as 1 percent to $6.91 a bushel in Chicago before trading at $6.865.
To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net
To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net
