Soybeans Gain on Speculation Supply to Tighten as Farmers Switch to Corn

Soybeans advanced for a second day on speculation that smaller plantings in the U.S., the world’s largest grower and exporter, may tighten global supply.

May-delivery soybeans gained as much as 0.5 percent to $13.8325 a bushel in Chicago before trading at $13.8125 at 2:27 p.m. Singapore time.

Production in the U.S. may fall to 3.169 billion bushels this year, Kyle Tapley, a senior agricultural meteorologist at MDA EarthSat Weather, said in Chicago yesterday. Last year’s crop was estimated at 3.329 billion bushels, according to the U.S. Department of Agriculture.

“Soybeans is the real market leader,” Wayne Gordon, an analyst at Rabobank Groep NV, said in Bloomberg Television interview with Rishaad Salamat. “We will see lower production of those commodities and we would see a further step-up in prices” as China sustained imports, he said.

Farmers in the U.S., the world’s largest grower and exporter, will cut soybean plantings by 1 percent to 76.609 million acres this year, the USDA said March 31. Acreage is forecast to shrink as farmers switch to corn, encouraged by higher profits, it said.

U.S. soybean stockpiles on Sept. 1, before the harvest, may drop to 136 million bushels, according to a Bloomberg News survey of 30 analysts. That’s down 2.9 percent from last month’s estimate by the USDA, which will update its forecast on April 8.

May-delivery corn gained 0.5 percent to $7.67 a bushel in Chicago, swinging from a 0.4 percent loss earlier. Wheat for July delivery increased 0.5 percent to $8.22 a bushel after dropping 0.8 percent earlier.

(Source: http://www.bloomberg.com/news/2011-04-07/soybeans-gain-on-speculation-supply-to-tighten-as-farmers-switch-to-corn.html)