What's Up: Soya beans rose from a one-month low on speculation that dry, warm weather in parts of Brazil will reduce yield potential, increasing demand for US supplies.
Soya withers in Brazil heat, but prices grow
Soya beans rose from a one-month low on speculation that dry, warm weather in parts of Brazil will reduce yield potential, increasing demand for US supplies. Corn also climbed.
Temperatures will be as much as 2.5°C above normal this week, increasing stress on crops in central and south-east Brazil, said Mike Tannura, the president of T-Storm Weather in Chicago.
About 45 per cent of the crop has received half of the normal rainfall this month. Brazil was expected to top the United States as the world's biggest producer for the first time in the year ending September 30.
"Perceptions that weather conditions are ideal in Brazil are starting to be questioned," said Jim Gerlach, the president of A/C Trading in Indiana. "People are starting to realise there are some problems developing."
Soya bean futures for March delivery rose 1.7 per cent to close at US$14.2925 a bushel in Chicago on Friday, trimming last week's drop to 4.2 per cent.
The price is up 18 per cent this year after dry weather also reduced output in the US to a four-year low.
Corn futures for March delivery advanced 0.8 per cent to $7.02 a bushel in Chicago. Still, the contract fell 3.9 per cent last week, the third straight decline.
Yesterday's drop to a five-month low of $6.875 may spur overseas demand for US supplies, Mr Gerlach said. Imports in China, the biggest consumer and producer after the US, surged 57 per cent last month from a year earlier and were the highest ever for the month, its customs office said yesterday.
Prices are up 8.6 per cent this year and 39 per cent since mid-June, as drought reduced US output for a third year.
Corn is the biggest US crop, valued at $76.5 billion last year, followed by soya beans, hay and wheat, government figures show.
* Bloomberg News