Chicago | Reuters — U.S. soybean futures firmed on Thursday, erasing losses made in the overnight trading session, on support from a government forecast for acreage expansion that came in below market expectations, traders said.
Gains in the new-crop contracts outstripped old-crop offerings due to the plantings outlook.
“While increased acres will have near-term bearish effect, they were below expectations, and the market may be able to shrug off bearishness readily, particularly on the front end,” Sterling Smith, futures specialist at Citigroup, said in a note to clients.
Corn prices also generated strength from the acreage view, while wheat prices fell on profit taking following a four-day rally that pushed prices to their highest in two months.
The U.S. Agriculture Department pegged 2014-15 U.S. soybean acreage at a record 79.5 million, three million acres above 2013 but below market forecasts.
Partially offsetting the effect of the USDA acreage estimate was its lower price projection, dropping from about $12.70 per bushel to $9.65, said Anne Frick, oilseeds analyst at Jefferies Bache (all figures US$).
“That’s a pretty big decline,” she said.
Chicago Board of Trade soybeans for March delivery gained four cents to $13.58-1/4 a bushel. New-crop November soybeans climbed 8-1/4 cents to $11.45-1/4 a bushel.
Concerns about weather in Brazil, where dry conditions were limiting crop production in northeastern states while rainy weather in other areas were slowing harvest, added further support to soybeans.
“The unfavourable weather in western Brazil… is delaying both harvesting and actual shipments of beans to the ports,” Futures International analyst Terry Reilly said.
CBOT March corn futures finished two cents higher at $4.55-3/4 a bushel. The new-crop December contract gained 1/2 cent to $4.68-3/4 a bushel.
USDA said it expected corn acreage to decline to 92 million acres as part of a 0.7 per cent reduction in the space U.S. farmers will devote to the eight major field crops this year.
Short-covering also supported corn prices and helped mitigate pressure from weakness in the wheat market.
CBOT March wheat fell four cents to $6.16-1/4 a bushel, posting its first losing session since Feb. 12.
Concerns about a return to cold weather in the U.S. Midwest next week following a warmup that melted much of the snow protecting the crop from winterkill limited declines.
But some forecasters said temperatures will not drop far enough to damage the crop and more snow was in the forecast for much of the region during the next week.
— Mark Weinraub is a Reuters correspondent covering ag markets from Chicago. Additional reporting for Reuters by Rod Nickel in Winnipeg and Christine Stebbins in Chicago.