CHICAGO: US soybean futures rallied for the second day in a row o n M onday, hitting a seven-month high on follow-through buying from a government report that pegged lower-than-expected soybean acreage this year, traders said.
The soybean market has gained 4.8 percent over the past two trading sessions after the US Agriculture Department's prospective plantings report early Friday raised concerns about the possibility of tight soybean supplies during the next year.
Corn futures also rose, with the buying in old-crop months out pacing new-crop contracts due to fears that exporters, ethanol refiners and livestock producers will struggle to find supplies in the next few months. Expectations that farmers will plant a huge number of corn acres this spring limited the gains in new-crop futures.
"The bull numbers from the report were old corn and new beans and that is what is leading us," said Chad Henderson, grain market advisor with Prime Agricultural Consultants.
The expected drop in US soybean acreage comes after hot and dry weather in South America curtailed harvest from key production areas.
"You not only have a compromised crop out of Argentina to deal with but all of a sudden you are talking about these acres being down (in the United States)," said Jason Britt, analyst with Central States Commodities. "You are not really growing these carryouts. There is just not much room for error here."
CBOT May soybeans settled up 18 cents at $14.21 a bushel. Prices peaked at $14.33 a bushel, their highest level since hitting $14.41-3/4 a bushel on Sept. 2, 2011. New-crop November soybeans rose 27-1/4 cents to $13.85-1/4 a bushel.
CBOT May corn was up 11 cents at $6.55 a bushel while the new crop December contract was 4-3/4 cents higher at $5.45 a bushel. May corn hit its highest level in nearly two weeks.
"You have got a tale of two crops now on corn," said Dewey Strickler, president of AgWatch Market Advisors. "You have got one with tight stocks, with the old crop, and one with what looks like an abundance of stocks with the new crop."
CBOT May wheat fell 3-3/4 cents at $6.57 a bushel.
Good weather for crop development in key growing areas of the US Midwest boosted prospects for a robust harvest adding to already plentiful wheat supplies.
The USDA predicted farmers in the world's top soybean producer, the United States, would plant 2 percent less acreage to the oilseed than expected.
That suggested supplies would tighten further after poor harvests due to drought in Brazil and Argentina, the world's second- and third-largest soy producers, which have driven soy prices this year
In its quarterly stocks report, the USDA's tally of corn stocks was also below expectations and the lowest in five years, although farmers were set to sow more land to corn than they had since 1937.
Financial markets in general drew support on Monday from surprisingly strong Chinese factory activity data which eased fears of a hard landing in the world's No. 2 economy.
A weaker US dollar helped agricultural commodities priced in greenbacks by making them cheaper on world markets, a factor which helped US exporters win business last week from Egypt, the world's biggest wheat buyer.
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