Soybeans Rise a Third Day as Argentine Farmers Plan Tax Protest

March 18 (Bloomberg) -- Soybeans rose for a third day on speculation that demand for the U.S. crop will improve as Argentine farmers withhold supplies over export taxes.

Groups representing growers in Argentina will lobby Congress to cut grain levies after negotiations with the government yesterday failed to resolve issues that led to strikes in 2008. Eduardo Buzzi, a farm leader, called on growers to demonstrate along the nation’s highways. Last year’s protests disrupted exports and led to domestic food shortages.

“The looming threat of increased protests will remain a supportive feature to the soybean market,” said Brian Grete, a senior analyst for Professional Farmers of America in Cedar Falls, Iowa. “A year ago, the strikes in Argentina helped to boost U.S. sales.”

Soybean futures for May delivery rose 2 cents, or 0.2 percent, to $9.15 a bushel on the Chicago Board of Trade, after yesterday reaching a one-month high of $9.2175. The most-active contract still is down 44 percent from a record $16.3675 reached in July.

Argentina is the world’s third-largest soybean exporter, after the U.S. and Brazil, U.S. Department of Agriculture data show. The South American nation is the biggest shipper of animal feed and vegetable oil made from the oilseed.

Argentina’s government doesn’t plan to change tariffs on farm exports, Ricardo Echegaray, the country’s tax agency director, said today in an interview in Buenos Aires.

Halting Sales

The soybean tax may be reduced to 27 percent from 35 percent for growers who produce less than 1,000 metric tons a year, the Buenos Aires newspaper Clarin reported yesterday, citing sources it didn’t name. Farmers have halted sales to push President Cristina Fernandez de Kirchner’s government to cut export taxes and ease trade restrictions.

Former president Nestor Kirchner, who was succeeded by his wife, asked farmers to drop their dispute with the government in a speech yesterday in La Plata.

“The government will try to make the farmers look like they are the problem,” reducing the chances for a quick settlement, said Zsolt Vincze, an assistant vice president for R.J. O’Brien & Associates in St. Paul, Minnesota. “The standoff is bullish for the short-term price outlook and negative long term because farmers will eventually have to sell crops.”

Soybeans are the second-biggest U.S. crop, valued in 2008 at a record $27.4 billion, behind corn at $47.4 billion, government figures show.