U.S. soybean futures are trading higher Friday; supported by a tight supply outlook and the uncertainty of the U.S. crop's potential.
The Chicago Board of Trade soybean contract for September delivery is up 5 1/4 cents at $16.61 1/2 a bushel. Most-active November soybeans, reflecting expectations for this autumn's harvest, is up 8 1/2 cents at $16.33 3/4 a bushel.
U.S. soybean inventories are estimated to shrink to extremely tight levels in 2013, and with the risk of U.S. production declining due to a historic drought, investors are maintaining bets on prices moving higher.
Soybean futures are garnering support from the market's need to keep prices at levels that will ration demand, but traders remain apprehensive of aggressively pushing prices higher with favorable August crop conditions aiding crop potential.
"Weather has been mostly benign during the first half of August, but the quality/quantity of the soybean crop is still up for debate," Joseph Vaclavik, president of brokerage Standard Grain, Inc., wrote in a morning market note.
Futures have declined recently on favorable weather for developing soybean crops, but traders still acknowledge modest improvements in crop yields won't alter the tight supply outlook for U.S. soybean supplies.
"Soybeans could see some more upside prices movement until we see greater evidence of demand rationing," Mr. Vaclavik added.
Yet, traders are taking a cautious approach awaiting definitive reports on crop potential, as soybeans move closer to maturity and harvest nears. Investors will focus on private crop forecasts until harvest results come in.
Professional Farmers of America will conduct an annual crop tour of fields from Ohio to South Dakota beginning Monday, releasing daily reports of corn and soybean crop conditions...
Source: Argentine Beef Packers S.A.
Back to News Headlines