A nice grain rally is kicking in, with plenty of specs and funds still short:
Soybean Price Gains as Dry Weather Threatens Brazil's Crop
Feb. 22 (Bloomberg) -- Soybean futures rose as much 2.6 percent in Japan, the biggest gain for a commodity in Asia, on concern dry weather is damaging crops in Brazil and Argentina, which together grow 45 percent of the world's soybeans.
Hotter weather in Brazil's major soybean-growing areas of Rio Grande do Sul, Parana and southern Mato Grosso are damaging plants just as beans are forming in pods, the Meteorlogix weather service said yesterday. In Argentina, more rain is needed to prevent crop losses, it said.
``People had expected the weather to be better in Brazil'' this week, Han Qizhi, a trading manager at COFCO Futures Co., said in a phone interview from Beijing. ``Forecasts suggest that may not be the case,'' adding to concern about the crops there.
Soybeans for delivery in February 2006 rose 800 yen to 31,320 yen a metric ton at 11:21 a.m. local time on the Tokyo Grain Exchange. A close at this level would be the highest since Dec. 20.
A smaller soybean crop in Brazil, the world's second-biggest supplier of the commodity, would help ease a global oversupply in 2004-05 that's contributed to a slump in prices. Prices on the Chicago Board of Trade, the world's biggest agricultural futures exchange, have declined 37 percent in the past year.
Soybeans for delivery in May rose as much as 14.25 cents, or 2.6 percent, to $5.70 a bushel in after-hours, electronic trading on the exchange today. They were at $5.69 a bushel at 1:48 p.m. Tokyo time.
The U.S. Department of Agriculture pegged global output at 228.62 million tons in 2004-05 on Feb. 9. That's 2.15 million tons less than the department predicted a month earlier and 23.21 million tons more than its forecast for demand.
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