CHICAGO: Chicago Board of Trade soyabean futures extended a rally on Thursday to a nine-month high as a sharp cut to Brazil’s official harvest forecast fanned concerns about weather damage to South American crops.
Corn reached its highest since June as traders also assessed the risk of dry weather cutting production of the grain in Brazil and Argentina.
The most-active soyabean contract was up 20-1/2 cents at $16.15-1/4 a bushel by 10 a.m. CST (1600 GMT). It earlier reached $16.33 a bushel, highest since May 13, after Brazilian food supply and statistics agency Conab reduced its soyabean harvest outlook by 15 million tonnes.
Conab now expects farmers in Brazil to harvest 125.4 million tonnes in 2021/22. That is much lower than the 134 million tonnes forecast by the US Department of Agriculture (USDA) in a separate World Agricultural Supply and Demand Estimates (WASDE) report on Wednesday.
“People are laughing at WASDE,” said Jim Gerlach, president of Indiana-based broker A/C Trading.
Some private analysts had already predicted Brazilian production would drop to around 125 million tonnes amid dry weather in the south of the country, and traders widely expect the USDA to make further cuts to South American supply.
“The market is still cutting its South American crop estimates,” said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia. “Argentina’s weather suggests that revision process likely has not finished.”
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