Soybeans Rise as Argentine Tax Protest May Spur U.S. Exports

April 3 (Bloomberg) -- Soybeans rose to a seven-week high on speculation that demand for U.S. supplies will improve as overseas buyers shift away from crops from Argentina, the second-biggest exporter.

U.S. exporters sold 599,842 metric tons of soybeans in the week ended March 26, up 40 percent from a week earlier and 53 percent more than the previous four-week average, the U.S. Department of Agriculture said yesterday. Farmers in Argentina are limiting sales in a yearlong dispute with the government over a 35 percent export tax.

“Export sales were favorable last week and should remain active,” said Greg Grow, director of agribusiness at Archer Financial Services Inc. in Chicago. “It’s been a positive week on the technical charts,” with soybeans yesterday reaching seven-week highs, Grow said.

Soybean futures for May delivery rose 18.5 cents, or 1.9 percent, to $9.955 a bushel on the Chicago Board of Trade, after earlier touching $9.975, the highest since Feb. 10. The most- active contract gained 8.6 percent for the week, the third weekly gain in four weeks.

Argentine farm groups met with government officials on March 31 but failed to resolve the dispute over export taxes. They are now trying to get enough support among lawmakers to have the issue debated in Congress.

The Congress on March 26 approved a proposal backed by President Cristina Fernandez de Kirchner to move up this year’s mid-term elections, possibly delaying any tax changes until later this year.

Hot, Dry Weather

The Argentina soybean crop may be smaller that expected after unusually warm, dry weather the last 30 days, said Brian Grete, senior market analyst for the Professional Farmers of America newsletter in Cedar Falls, Iowa. The harvest may be less than 40 million metric tons, down from 43 million estimated last month by the U.S. Department of Agriculture and below last year’s production of 46.2 million tons.

“The rains in late February and early March provided only temporary relief and crops appear to have declined since then,” Grete said. “Smaller crops and continued political tensions may keep overseas buyers wary,” shifting purchases to U.S. supplies, Grete said.

Soybeans are the second-biggest U.S. crop, valued last year at $27.4 billion, government figures show. Corn was the most valuable crop at $47.4 billion. The U.S. is the world’s largest grower and exporter of soybeans.