Agriculture resurgent as soybeans top $10 on weather concerns

epa05249160 (FILE) A file picture dated 31 March 2014 shows machines during the beginning of the harvest of soy in farm Delta in Correntina, Bahia, Brazil. Brazil, one of the world's leading food producers, is projected to harvest 210 million metric tons of grain this year, down 0.6 percent from the March forecast, the government said 07 April 2016. Even with the lower forecast, Brazil's 2016 harvest would still exceed last year's record total of 209.5 million metric tons. The Brazilian Institute of Geography and Statistics (IBGE) projects that soybeans, rice and corn, Brazil's three leading crops, will account for 93 percent of farm production this year and occupy 86.9 percent of the harvested area. EPA/SEBASTIAO MOREIRA

Bloomberg

Soybeans extended a rally above $10 a bushel, the highest price since July, and corn traded near $4 a bushel as unfavourable weather in South America and prospects for improved demand for U.S. supplies bolstered agriculture
markets.
Dryness in Brazil is causing conditions to deteriorate for its second corn crop, and the country suspended import tariffs for the next six months, signaling the grower may need to ship grain in.
Flooding in Argentina, the third-largest soybean grower, is expected to cut output there by about 5 percent, according to Oil World. With South American plants under threat, more buyers may turn to U.S. growers for supplies, especially as the dollar’s decline against the real make its shipments relatively cheaper.
The gains show that futures may be bottoming after reaching multi-year lows this month. Even with most grains still plagued by supply surpluses, optimism has been growing over the past several weeks amid signs of stabilizing demand in China and unexpected weather concerns for South American harvests. The likelihood of a La Nina pattern this year also brings the threat of drought to U.S. growing areas later this season.
“Crop estimates are trending lower both in Brazil for corn and Argentina for soybeans at a time when we largely thought those crops were made and soon to be put away,” Brian Roach, president of Roach Ag Marketing in Boca Raton, Florida, said.

Prices Jump
Soybeans for July delivery on the Chicago Board of Trade climbed as much as 0.9 percent to $10.28 1/2 a bushel, the highest since July, extending a rally to the third straight day. Corn for the same delivery month was trading near $4 a bushel, after reaching the highest since August on Wednesday. Both crops have risen more than 12 percent this month. Wheat rose above $5 a bushel, touching the highest since mid-November.

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