Soybean Futures Hit Multimonth Highs on Drier Forecasts
Soybean futures climbed to the highest point in over three months on Friday, as drier Midwestern weather exacerbated concerns about the crop.
Oilseed contracts at the Chicago Board of Trade inched above $10 for the first time since March 24, when bumper harvests in South America started pressuring U.S. prices. But soybean futures have rallied since the U.S. Department of Agriculture reported last week that farmers sowed fewer acres of the crop than expected.
The prospect that dry and hot weather in the northern Plains, which has already devastated some of the spring wheat crop, could take a toll on soybean fields there has prompted traders to factor that risk into prices. Drier weather in western parts of the Midwest will also increase stress on soybeans, said MDA Weather Services.
Weather worries are also supporting corn prices. Unlike soybeans, the grain crop is at a key yield-forming stage, making it more vulnerable to short-term changes in the weather.
Most actively traded CBOT August soybean futures climbed 1.6% to $10.01 a bushel, marking nine consecutive days of gains. CBOT September corn futures recovered from losses on Thursday to close 0.5% higher at $3.92 1/2 a bushel.
Wheat futures sagged, however. Prices for spring wheat, which has a higher protein content than other varieties, have soared recently as a result of the drought in the northern Plains.
Analysts are "worried that global supplies of high protein wheat will be thin this year," said Terry Reilly, senior commodity analyst at brokerage Futures International, forcing some millers to pay more.
September-dated spring wheat futures at the Minneapolis Grain Exchange fell 0.3% to $7.66 3/4 a bushel. CBOT September winter wheat fell 0.7% to $5.35 a bushel.
Erratic weather has disrupted this year's growing season so far. Analysts say it could end a streak of several years of bumper harvests if conditions don't improve. Much of the spring wheat crop is already beyond repair, they say.
"June 2017 is going to go down as one of the driest in history in some regions of the United States," said Karl Setzer, an analyst at MaxYield Cooperative in West Bend, Iowa.
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(END) Dow Jones Newswires
July 07, 2017 15:35 ET (19:35 GMT)