Commodities

CHICAGO—U.S. soybean futures rose to a seven-week closing high as dry weather threatened to damage crops in Argentina, the world’s third-largest soybean producer.
Soybeans for March delivery at the Chicago Board of Trade settled up 14 1/2 cents, or 1%, to $14.88 3/4 a bushel on Monday, the highest settlement for the front-month contract since Dec. 14.
Scorching heat and cloudless skies over the past few weeks have raised concerns that Argentina may not produce the expected bumper crops that would help rebuild tight global supplies of soybeans. The threat looms after droughts last year in both South America and the U.S. stunted production of the oilseed.
Weekend rains in Argentina were lighter than expected, renewing concerns about dryness in key growing areas. And no significant rain is expected until next weekend.
“We’re worried, and there’s not much we can do,” said Andres Rosenberg, a soybean grower in Argentina. Mr. Rosenberg predicted that portions of his crops in central Buenos Aires province will yield 15% to 20% fewer soybeans than they would with normal rainfall.
U.S. soybean futures soared to record highs last September as worries about the U.S. drought peaked. Prices then eased as the U.S. crop turned out better than expected, but supplies remain tight and demand is strong.
Futures also drew support Monday from reports indicating robust export demand for U.S soybeans. The U.S. Department of Agriculture said private exporters reported selling 116,000 metric tons of soybeans for delivery to China, the world’s largest soybean importer. It was the fifth time in two weeks that the USDA reported new sales of U.S. soybeans to China.
The USDA also said Monday that officials had inspected or weighed for export 53.89 million bushels of soybeans in the week through Thursday. That was well above the range of 36 million to 42 million bushels predicted by analysts.
“We’re just using beans faster than we should,” said Steve DeCook, president of Four Seasons Commodities Corp., a Dallas-based commodity trading advisory firm that manages about $64 million.
Heavy rainfall early in the growing season benefited crops in Argentina, but the recent drier weather trend has become prolonged enough to raise worries about production losses. Dry conditions are likely to persist in about 40% of the country’s soybean belt, private forecaster Commodity Weather Group LLC said Monday.
The weather has been more favorable for soy crops in Brazil, which is expected to surpass the U.S. as the world’s top soybean producer based on the size of its crop that will be harvested in the next few months.
Closely watched crop forecaster Informa Economics Inc. on Friday raised its production estimate for Brazil’s current soybean crop by 1% to 84 million metric tons, according to traders. But that was outweighed by a cut in Informa’s soybean production estimate for Argentina, by 7% to 54.5 million tons.
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