Soybean Futures Gain in Chicago on Concerns of Supply Shortage

July 2 (Bloomberg) -- Soybean futures rose for a second day in Chicago on concern smaller-than-expected plantings in the U.S., the world’s biggest exporter, raises the risk of a global supply shortage.

More rain is needed for planting and developing soybeans in much of southern U.S., weather forecaster Meteorlogix LLC said yesterday. The U.S. Department of Agriculture said June 30 farmers will sow a record 77.483 million acres with soybeans. That compared with an average of 78.16 million acres forecast in a Bloomberg News survey of 24 analysts. Inventories are forecast to drop to a 32-year low of 110 million bushels by Aug. 31.

“There are concerns about potential supply disruptions or potential supply shortages,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia in Sydney said by phone today. “If the U.S. fields are hurt for whatever reason, then the fact that they’ve got a lower than expected area in the ground” will mean global supplies will remain tight, he said.

Soybeans for November delivery, after the U.S. harvest, rose as much as 1.3 percent, to $10.29 a bushel in after-hours electronic trading on the Chicago Board of Trade. The contract was at $10.185 a bushel at 11:13 a.m. Singapore time.

Wheat for September delivery, the contract with the most open interest, gained as much as 1 percent to $5.4075, and was at $5.3725 a bushel 11:08 a.m. in Singapore. Wheat for July delivery, the contract with the most volume, added 0.9 percent to $5.11 a bushel.

Areas planted to soybeans in the north China plain “have turned very hot and dry during the past week, increasing stress to this portion of the crop after earlier showers,” Meteorlogix said yesterday.

China Weather

Key soybean, wheat and corn growing areas in Hebei, Shandong and Henan in China “are likely to remain mostly dry with some extreme heat during the next five to seven days, as the monsoon gets only as far north as the Yangtze river valley,” Meteorlogix said in a global weather report.

The affect of dry weather in China on crops including soybeans and wheat “is something that needs to be monitored,” Commonwealth Bank’s Mathews said. “That may be another factor which will help Chinese soybean imports from countries such as the U.S.” and from South America, he said.

In the export market, Japan plans to buy 108,000 tons of the grain today, including 87,000 tons from the U.S. Taiwan is seeking 82,350 tons of wheat in a tender.

Dry weather and some hot temperatures in the spring wheat areas of the Urals in Russia and west Kazakh will increase stress to the crop, Meteorlogix said in its 48-hour forecast published yesterday.

Russia is tied with Canada as the world’s second-largest exporter of wheat, flour and wheat products, while Ukraine is number 4, according to USDA estimates on June 10.

December-delivery corn lost as much as 0.6 percent to $3.67 a bushel in Chicago and was at $3.675 at 11:20 a.m. Singapore time.