Chicago | Reuters — U.S. soybean futures surged to their highest in 6-1/2 years on Friday as the rain outlook in key South American growing areas remained uncertain, threatening harvest prospects as global demand strengthens, traders said.
Forecasts of low U.S. soybean inventories and strong demand from U.S. processors and importers like China have made the market sensitive to possible setbacks for South American crops due to be gathered in the coming months.
“There’s virtually no room for error on the soybean balance sheet,” StoneX chief commodities economist Arlan Suderman said in a note to clients.
The weather concerns also lent support to corn futures, which hit their highest since Nov. 30.
Shipping delays for crops coming out of Argentina due to a strike by the country’s oilseed workers and grains inspectors added to the bullish tone, with no sign that a wage deal might be reached in the short term.
Wheat futures dipped on some end-of-week profit taking after rising 1.7 per cent on Thursday.
Chicago Board of Trade January soybean futures ended up 18-3/4 cents at $12.20 a bushel (all figures US$). Prices peaked at $12.24-3/4 a bushel, the highest since June 30, 2014.
CBOT March corn was five cents higher at $4.37-1/2 a bushel.
“South American weather never quite plays ball,” said Tobin Gorey, director of agricultural strategy at the Commonwealth bank of Australia.
Argentine soy planting has been slowed by dryness, the Buenos Aires Grains Exchange said on Thursday.
While larger producer Brazil has seen heavier rain, traders are still cautious about the effects of drought at the start of the growing season.
“Grain markets continue to monitor weather events in South America as plantings in some regions begin to slow due to dryness,” brokerage Allendale said in a note.
CBOT March soft red winter wheat was off 1/2 cent at $6.08-1/4 a bushel.
— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.