Soya surges 2.5 percent

US soyabean futures surged 2.5 percent on Monday for their biggest gain in two weeks on a declining dollar and concerns that rains in Argentina will not be ample enough to relieve crop stress after weeks of dry weather in the major South American grain and soya exporter. Corn and wheat futures each gained more than 1 percent, mirroring a broad commodities rally in which crude oil and gold climbed as the dollar fell to a three-week low.
Soyabean soared early and finished near their session high at the Chicago Board of Trade amid disappointing weekend rains and a forecast for only "patchy" precipitation in Argentina, the world's biggest exporter of soya products. "It looks like the much-anticipated rain event will wind up being a dud for most key growing areas there (in South America)," INTL FCStone analyst Matt Zeller said in a note to clients.
Some areas of Argentina received as much as 50 millimeters (2 inches) of rain over the weekend while others had only 2 millimeters, Martin Fraguio, executive director of Argentina's main corn industry chamber, Maizar, told Reuters. CBOT soyabeans for March delivery settled 30-1/2 cents higher at $12.17-1/2 per bushel, the biggest daily bounce since gaining 3 percent on January 9 in the first days of the drought in South America.
CBOT March corn ended 8-1/2 cents higher at $6.20 per bushel, its highest level since January 12, while CBOT March wheat finished 9-1/4 cents higher at $6.19-3/4. "A lot of the damage to (Argentine) corn has already been done and pretty well priced into the market. Soyabeans are going into the critical stages of development and that's what has gathered the attention of the market today," said Shawn McCambridge, analyst at Jefferies Bache in Chicago.
Global wheat stocks are at the highest level in more than a decade and could help blunt the impact of lower corn production in Argentina. But "you can't substitute wheat for soyabeans," McCambridge said. It was also a "risk on" day, traders said, with the Reuters Jefferies index of 19 commodities climbing 1.2 percent. "The dollar being a little bit a weaker is what's driving this," said Karl Setzer, analyst at the MaxYield Co-operative in West Bend, Iowa. "We've developed a pretty fine pattern of trading higher the first day of the week and drifting lower the rest of the week," Setzer said.
The dollar fell against a basket of currencies, with the euro hitting a near three-week high against the greenback on optimism that Greece will cut a deal with its creditors. A weaker dollar makes commodities priced in the US currency more attractive to exporters. Firm cash grains markets in the US Midwest also underpinned futures in Chicago, with the cash corn basis in central Illinois climbing to its highest point in four decades for this time of year, traders and analysts said. US farmers, flush with record earnings of recent years, have delayed sales of corn and soyabeans in the hope of selling at higher prices as supplies tighten ahead of the spring planting season.