Investing.com - Soybean futures were up for a third day on Tuesday, trading just below the previous session’s six-month high as ongoing concerns over drought-stricken crops in major South American soy growers continued to drive prices higher.
On the Chicago Mercantile Exchange, soybeans futures for May delivery traded at USD13.8712 a bushel during European morning trade, gaining 0.56%.
It earlier rose by as much as 0.65% to trade at a session high USD13.8725 a bushel. On Monday, prices hit USD13.8812 a bushel, the highest since September 14.
Soybean futures have rallied almost 14% since the beginning of February, including a gain of nearly 6% in March, as market sentiment has been dominated in recent months by concerns over distressed crops in major South American soy growers and on hopes demand from top consumer China will remain robust in the near-term.
Concerns over soy crops in Brazil lingered after Brazilian commodities consultancy AgRural further cut its forecast for Brazil's 2011-12 soybean production.
AgRural now sees Brazil harvesting 66.68 million metric tons of soybeans, down 1.9% from the firm's previous forecast in February, and 11.5% less than in the 2010-11 crop.
The downward revision came after influential industry group Oil World cut its estimate for Brazil’s soy crop last week by 1.5 million tonnes to 66.5 million tonnes, down 12% from 75.3 million a year earlier.
Soy traders were also monitoring crop conditions in Argentina, after the nation’s Agriculture Ministry lowered its soy production forecast to 44 million metric tons in the current marketing season, down from 49 million harvested in 2011 and 46.5 million estimated by the U.S. Department of Agriculture earlier in March.
The gloomy South American crop outlook fuelled speculation the USDA will further cut estimates of soybean output from Brazil and Argentina when it releases its updated global supply and demand outlook on March 30.
Last month, the USDA lowered its combined soybean production estimates for Brazil and Argentina and said that reduced South American output will boost U.S. exports by 22% to a record 42.2 million tons in the marketing year that begins in September.
Brazil and Argentina are major soy exporters and compete with the U.S. for business on the global market. Downbeat South American crop prospects could increase demand for U.S. supplies.
Prices also drew support from expectations demand from top consumer China will remain strong in the near-term. In February, U.S. farmers sold 2.923 million metric tons of the oilseed to China in the biggest one-day deal on record.
China is the world’s largest soybean consumer and is expected to account for nearly 60% of global trade of the grain in the 2011-12 season, according to the USDA.
Meanwhile, agricultural commodity traders were eying Friday’s release of the USDA’s acreage projection estimates for how many acres farmers will plant with the grain.
Market talk that U.S. farmers are favoring corn plantings at the expense of soybeans is also supporting prices. Market participants are expecting U.S. farmers to raise soy plantings only slightly to 75.4 million acres from 75 million last year.
Elsewhere on the Chicago Mercantile Exchange, wheat for May delivery added 0.33% to trade at USD6.6175 a bushel, while corn for May delivery climbed 0.75% to trade at USD6.4325 a bushel.
On the Chicago Mercantile Exchange, soybeans futures for May delivery traded at USD13.8712 a bushel during European morning trade, gaining 0.56%.
It earlier rose by as much as 0.65% to trade at a session high USD13.8725 a bushel. On Monday, prices hit USD13.8812 a bushel, the highest since September 14.
Soybean futures have rallied almost 14% since the beginning of February, including a gain of nearly 6% in March, as market sentiment has been dominated in recent months by concerns over distressed crops in major South American soy growers and on hopes demand from top consumer China will remain robust in the near-term.
Concerns over soy crops in Brazil lingered after Brazilian commodities consultancy AgRural further cut its forecast for Brazil's 2011-12 soybean production.
AgRural now sees Brazil harvesting 66.68 million metric tons of soybeans, down 1.9% from the firm's previous forecast in February, and 11.5% less than in the 2010-11 crop.
The downward revision came after influential industry group Oil World cut its estimate for Brazil’s soy crop last week by 1.5 million tonnes to 66.5 million tonnes, down 12% from 75.3 million a year earlier.
Soy traders were also monitoring crop conditions in Argentina, after the nation’s Agriculture Ministry lowered its soy production forecast to 44 million metric tons in the current marketing season, down from 49 million harvested in 2011 and 46.5 million estimated by the U.S. Department of Agriculture earlier in March.
The gloomy South American crop outlook fuelled speculation the USDA will further cut estimates of soybean output from Brazil and Argentina when it releases its updated global supply and demand outlook on March 30.
Last month, the USDA lowered its combined soybean production estimates for Brazil and Argentina and said that reduced South American output will boost U.S. exports by 22% to a record 42.2 million tons in the marketing year that begins in September.
Brazil and Argentina are major soy exporters and compete with the U.S. for business on the global market. Downbeat South American crop prospects could increase demand for U.S. supplies.
Prices also drew support from expectations demand from top consumer China will remain strong in the near-term. In February, U.S. farmers sold 2.923 million metric tons of the oilseed to China in the biggest one-day deal on record.
China is the world’s largest soybean consumer and is expected to account for nearly 60% of global trade of the grain in the 2011-12 season, according to the USDA.
Meanwhile, agricultural commodity traders were eying Friday’s release of the USDA’s acreage projection estimates for how many acres farmers will plant with the grain.
Market talk that U.S. farmers are favoring corn plantings at the expense of soybeans is also supporting prices. Market participants are expecting U.S. farmers to raise soy plantings only slightly to 75.4 million acres from 75 million last year.
Elsewhere on the Chicago Mercantile Exchange, wheat for May delivery added 0.33% to trade at USD6.6175 a bushel, while corn for May delivery climbed 0.75% to trade at USD6.4325 a bushel.