Soybean Traders Ease Bets on Bad Weather
By Benjamin Parkin
Soybean futures fell as traders pulled back from recent weather-related buying.
Oilseed futures for January fell 1.1% to $9.92 a bushel at the Chicago Board of Trade, with traders taking profits after the market hit a multimonth high earlier this week.
Dry conditions in Argentina have fostered concern about a La Nina weather pattern that could cut into the country's soybean and corn crop. But analysts stressed that it was still too early to expect significant loss of production.
"While conditions in Argentina are in fact drier than usual, it is too early to say the country is suffering from a drought. There is plenty of time for rains to develop," said Karl Setzer, an analyst at MaxYield Cooperative. "That said, the longer it takes for rains to develop, the greater the chance of yield loss."
Some showers in Argentina over the weekend wouldn't be enough to offer significant relief to dry crops, said MDA Weather Services in a note to clients, though the outlook in six to 10 days was wetter in some regions.
Grain futures were also lower on Thursday. CBOT March wheat futures fell 0.9% to $4.21 1/2 a bushel, while March corn contracts slid 0.4% to $3.51 1/2.
Political turmoil in Brazil added to the pressure on the grain-and-oilseed sector. The Brazilian real weakened against the U.S. dollar as investors bet that the country's government would have more difficulty enacting planned reforms.
A weaker real, which fell to 3.3 per dollar from 3.24 on Wednesday, made Brazil's corn and soybean produce cheaper as exports against U.S. rivals.
The WSJ Dollar Index, which tracks the U.S. currency against a basket of others, rose 0.3% to 87.21 on Thursday.
Weekly export sales reported by the U.S. Department of Agriculture were mixed, doing little to support prices. Exporters sold 2.086 million metric tons of soybeans in the week ended Nov. 30, well above pre-report estimates. Soybean oil sales also beat expectations, while corn and wheat sales were within the range of estimates.
Write to Benjamin Parkin at [email protected]