BLBG:Soybeans Gain First Time in Four Days as USDA Trims Global Supply Forecast
Soybean futures advanced, paring a second weekly loss, after the U.S. Department of Agriculture lowered its estimates for global supplies.
March delivery soybeans gained as much as 1 percent to $11.945 a bushel on the Chicago Board of Trade, after losing 1.7 percent yesterday as the cut in global inventories was smaller- than-expected. Futures traded at $11.8975 at 3:45 p.m. in Singapore, paring the weekly loss to 0.6 percent.
Lower harvests in Argentina and Brazil will cut the global output, helping pare global stockpiles to 63.43 million metric tons, smaller than the 64.54 million tons forecast in December, the USDA said yesterday. Analysts surveyed by Bloomberg had expected inventories to fall to 62.95 million tons on average.
“The picture painted for oilseed prices was a little better than for corn and wheat,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia (CBA), said in a report today. “Global soybean stocks for 2011-2012 were reduced this month, and are now forecast to be 10 percent tighter than in 2010-2011,” he said, referring to soybean inventories.
Global production will fall to 257 million tons, smaller than the 259.22 million-ton forecast in December, the USDA said. World output was a record 264.18 million tons last year.
Output will trail global demand at 259.3 million tons, smaller than the 260.09 million tons forecast last month, according to the USDA.
The agency cut its estimate on Brazil, the second-largest soybean grower, by 1 million tons, and Argentina, the third- largest, by 1.5 million tons as dry weather hurt crops.
“The return of La Nina weather conditions in South America leaves risks skewed to the upside this spring, especially for soybeans,” Goldman Sachs Group Inc. (GS) said in a report today.
Corn Declines
March-delivery corn traded little changed at $6.1125 a bushel, after declining as much as 1.1 percent to $6.05, the lowest price for a most-active contract since Dec. 21. Futures are set for a 5 percent loss this week, the biggest such slump since the five days ended Sept. 30. They plunged 6.1 percent yesterday after the USDA raised its global supply estimates.
Global production will exceed demand for the first time in three years as bigger harvests in the U.S., the largest grower, Russia, Ukraine and the European Union more than offset a forecast decline in Argentina, the U.S. Department of Agriculture said yesterday. That prompted the agency to raise its world inventory estimate. Analysts had forecast a decline in this season’s stockpiles.
The USDA lowered corn output estimate for Argentina, the second-largest shipper after the U.S., by 3 million tons to 26 million tons from its December forecast.
“Rabobank expects significant further reductions in production in the region with likely drought impacts double those currently realized by the USDA,” analysts led by Luke Chandler wrote in a report today, referring to soybeans and corn output estimates for South America.
Wheat for March delivery gained 0.3 percent to $6.0625 a bushel, paring the second weekly loss to 2.9 percent.
To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
