Soybeans, Wheat Gain in Chicago as Losses Spur Investors to Buy

By Luzi Ann Javier

June 29 (Bloomberg) -- Soybean and wheat futures rallied in Chicago as speculators took advantage of last week’s losses to purchase, and on concern global supply may be lower than earlier estimates. Corn futures declined.

Soybeans for November delivery fell 1.5 percent to end the week at $9.91 a bushel last week. Wheat dropped for a fourth straight week, stretching a losing streak to 16 percent in the four weeks through June 26.

“Speculators are holding large net-short positions in wheat,” Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney, said by phone today, referring to bets prices will fall. “We might be seeing some short covering ahead of the USDA reports.”

The U.S. Department of Agriculture will release tomorrow its latest crop plantings forecast and its quarterly inventories estimate.

Soybeans for November delivery, after the U.S. harvest, rose as much as 0.7 percent to $9.9775 a bushel in after-hours trading and last traded at $9.94 at 1:22 p.m. Singapore time.

Wheat for July delivery gained as much as 1.1 percent to $5.40 a bushel and last traded at $5.39 a bushel.

Corn for December delivery slipped 0.3 percent to $4.03 a bushel, having earlier lost as much as 0.9 percent.

Argentina, the world’s fourth-largest exporter last year, may cease shipments of the grain for the first time in at least a century, as drought curbs plantings.

Output may equal the amount consumed by domestic millers, as continued dry weather until September is forecast to cut harvests in the 2009-2010 season by 28 percent to 6 million tons, from the previous season, said Eduardo Anchubidart, an economist at the Buenos Aires Cereals Exchange.

U.S. Wheat

Areas planted to spring-wheat in the U.S., the world’s largest exporter, will be 13.009 million acres, according to estimates by analysts surveyed by Bloomberg. That’s less than the 13.304 million acres forecast by the U.S. Department of Agriculture in March.

“We might see possibly reduced estimate for global wheat production which will be a supportive factor for the wheat price,” Hassall said. “We’ve got harvest pressure.”

Soybeans will be sown on 75.75 million acres (30.7 million hectares) in 2009 in the U.S., the world’s biggest grower and exporter, Lanworth Inc. said in a report June 26. That’s down from the government’s March estimate of 76.02 million acres. Lanworth, a satellite-image provider, made its estimates based on images and ground reference data collected from 13 states which account for 80 percent of the total area planted to and soybeans. The rest of it comes from estimates in the USDA plantings report.

Soybean inventories will probably be 585 million bushels, according to an average estimate of 17 analysts in a Bloomberg survey. That would be down 13 percent from 676 million a year earlier and the smallest since June 2004.

The Korea Feed Association, its members in Busan and the Major Feed mill Group last week purchased 155,000 tons of soybean meal last week through private negotiations, according to three industry executives who are familiar with the trade.

-- With assistance from Jeff Wilson in Chicago, Jae Hur in Singapore and Shinhye Kang in SeoulEditors: Matthew Oakley, Ravil Shirodkar

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net