US soyabean futures hit a near four-month high on Tuesday, rallying for a third straight session as dry weather threatened Brazil's crop prospects and fresh export demand emerged for US supplies, traders said. The gains came on the eve of a ceremony in which a Chinese trade delegation, headed by China's heir apparent Xi Jinping, will sign agreements to buy US soyabeans, valued by trade sources at around $6 billion or about 11 million tonnes.
The deals with be signed in Iowa, where Vice President Xi will visit a soyabean farm and meet business leaders. Last year a similar Chinese trade delegation purchased 11.5 million tonnes of US soyabeans valued at $6.7 billion. The USDA confirmed some of the sales the following day, rallying the market.
Wheat and corn futures both fell about 1 percent, pressured by a rally in the dollar and a forecast for a record-large Australian wheat crop. At the Chicago Board of Trade, March soyabeans settled 3 cents higher at $12.55 per bushel, after rising to $12.61-3/4, the highest spot soyabean price on the continuous chart since October 17. CBOT March wheat ended down 6-1/4 cents at $6.35 per bushel and March corn fell 6 cents at $6.33-1/2.
The soya market has risen 2.2 percent in three days on concerns over dry weather stressing the crop in far southern Brazil, the world's No 2 soya producer and No 1 exporter, and in neighbouring Paraguay. The dry conditions have prompted some analysts to lower their crop estimates. Hamburg-based analyst Oil World cut its forecast of Brazil's 2011/12 soyabean crop to 69.5 million tonnes from 70 million previously. US analyst Michael Cordonnier of Soyabean and Corn Advisor lowered his Brazilian soyabean estimate by a million tonnes in his weekly report, to 69.0 million tonnes, 3 million below the US Department of Agriculture's current forecast.
Both Oil World and Cordonnier also lowered their estimates of the soyabean crops in Paraguay, while Oil World raised its forecast of Argentina's soya crop to 47.0 million tonnes from 46.5 million previously. Soyabean prices drew additional strength from fresh US export sales. USDA confirmed sales of 283,000 tonnes of US soyabeans to unknown destinations, including 215,000 tonnes for 2011/12 delivery and 68,000 for 2012/13.