Soybeans Rise as Farmers May Withhold Crops After Price Slump

By Jeff Wilson

Oct. 16 (Bloomberg) -- Soybeans rose from a 13-month low on speculation that U.S. farmers will withhold crops from the market after prices plunged from a record in June.

Cash soybean prices in parts of the Midwest have fallen more than 50 percent from highs reached three months ago. With the harvest just past the halfway point, farmers who already got government subsidy checks in the past week don't need to sell any more of their crops for now, analysts said.

Soybean processors and other users of soybeans ``were buying, apparently scared that they can't get enough beans from the farmer,'' said Charlie Sernatinger, a market analyst for Fortis Clearing Americas LLC in Chicago. ``Farmers are selling less than 5 percent of the soybeans'' they are currently harvesting, Sernatinger said.


Soybean futures for November delivery rose 7.75 cents, or 0.9 percent, to $8.8025 a bushel on the Chicago Board of Trade. The price earlier touched $8.38, the lowest for a most-active contract since Aug. 27, 2007. Before today, soybeans were down 47 percent from the all-time high of $16.3675 on July 3.

Farmers will harvest 2.983 billion bushels of soybeans this year, the U.S. Department of Agriculture said last week, up 1.7 percent from a September forecast, as increased acreage more than makes up for a dry August that reduced yields. A crop of that size would be 11 percent bigger than last year after farmers planted 19 percent more acres with the oilseed.

The soybean harvest was 51 percent complete as of Oct. 9, the USDA said this week.

Last year's U.S. soybean crop was valued at $26.8 billion, second only to corn, which was worth, $52.1 billion, government figures show.

To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net.