GRAINS-U.S. soy rises for 5th day on China buying, Brazil port strike
* Soybean demand shifting to U.S. from South America
* Dry Argentine weather also supportive for prices
* Wheat and corn follow soybeans higher
(Adds U.S. trading session, analyst quotes; changes dateline from AMSTERDAM/SINGAPORE) CHICAGO, Feb 22 (Reuters) - U.S. soybean futures rose more than 1 percent on Friday to a 3-1/2-month high, gaining for the fifth straight day as top soybean importer China increased its purchases from the United States and Brazilian port workers went on strike. Soybeans were up 5 percent for the week, on track to post the biggest one-week rise in seven months, after workers at Brazil's Santos and Paranagua ports went on strike for six hours but called off industrial action previously set for Tuesday.
A fresh sale of U.S. soy to China rather than from Brazil boosted soybeans above the resistance level of $15 per bushel. The strike could shift even more soy export business to the United States and away from Brazil. The two countries are the world's No.1 and No.2 suppliers of soybeans, respectively. "Strikes at the two big export ports, when there is already a significant backlog and harvest will soon pick up, are a serious issue," said Rich Nelson, chief strategist for Illinois-based research and advisory firm Allendale Inc. "The U.S. will pick up a few extra orders as this issue progresses," Nelson said. Wheat edged higher, recouping some of the last session's deep losses, but the market is on track for a fifth week of decline as a snowstorm in the U.S. Plains brought relief to the drought-stricken winter crop. Corn posted modest and tepid advances on spillover buying from the soaring soybean market. Corn and soybeans also continued to find support from dry weather that was trimming production prospects in Argentina. Concern about dry weather in Argentina has resurfaced with little to no rainfall expected in the near term, said Andy Karst, meteorologist for World Weather Inc. "There was some light rain Wednesday and Thursday but not a lot more in drought areas of Argentina for the next two weeks," he said. Karst said the driest areas were in southern Argentina, "especially in the southwest, which is a big corn-growing area". Overall satisfactory crop weather continues in Brazil. "Most of Brazil is in pretty good shape," Karst said. Argentina is the world's second-largest corn producer after the United States, the third-largest soybean exporter and the largest exporter of soymeal and soyoil. At 9:30 a.m. CST (1530 GMT), Chicago Board of Trade March soybeans were up 14-1/4 cents per bushel at $15.02, March wheat was up 3-3/4 at $7.25 and March corn was up 2-1/2 at $6.93-1/4. Traders and analysts cited the $15 level in soybeans as a key psychological resistance mark and a point that CBOT soy options traders were eyeing. March options expire on Friday. "Of secondary interest, the psychological $15 mark was broken as well," Nelson said. "Options expiration also is today and there is big open interest in the $15 calls." A large open interest position in options often acts as a magnet for the futures market. "Soybean is trading above $15 (a bushel), the highest since December, partly due to weather in South America and to logistics problems there," said Erin Fitzpatrick, Rabobank analyst.
BUSINESS SHIFTING Traders said the issues in South America continued to shift business to the United States. The U.S. Department of Agriculture (USDA) on Friday said private exporters had reported the sale of 410,000 tonnes of U.S. soybeans to China. Trade sources on Thursday told Reuters that Chinese importers have booked up to nine cargoes of U.S. soybeans this week for shipment beginning next month, with port congestion in Brazil likely to delay shipments. Strong global demand for Brazil's big corn and soybean crops has two to three times more ships lined up to load at its two main ports than a year earlier. Fifty-nine ships were waiting to load grain at Santos port on Thursday versus 29 a year ago, data from SA Commodities/Unimar showed. At the other main grain port, Paranagua, 82 ships were waiting compared with 31 ships this time last year. Gains in wheat and corn were slowed by improved crop weather in the United States following the worst drought in over 50 years and on U.S. government outlooks for a strong rebound in crop production. The U.S. corn stockpile will more than triple this year following a record harvest and the U.S. soybean crop will be a record 3.405 billion bushels, a 13 percent increase from 2012's drought-hit crop, the USDA said on Friday.
Prices at 9:34 a.m. CST (1534 GMT)
LAST NET PCT YTD CHG CHG CHG CBOT corn 693.75 3.00 0.4% 7.3% CBOT soy 1503.00 15.25 1.0% 25.4% CBOT meal 444.20 6.90 1.6% 43.6% CBOT soyoil 51.23 -0.08 -0.2% -1.7% CBOT wheat 724.25 3.00 0.4% 11.0% CBOT rice 1565.00 -18.50 -1.2% 7.2% EU wheat 243.00 0.50 0.2% 20.0%US crude 92.61 -0.22 -0.3% -6.3% Dow Jones 13,923 42 0.3% 14.0% Gold 1574.69 -.97 -0.1% 0.7% Euro/dollar 1.3158 -0.0030 -0.2% 1.6% Dollar Index 81.5480 0.0870 0.1% 1.7% Baltic Freight 740 3 0.4% -57.4% * All grain and oilseed prices for second position. Paris
futures prices in Euros per tonne, London wheat in pounds per tonne and CBOT in cents per bushel.
(Additional reporting by Karl Plume in Chicgo, Christine Stebbins in Washington, Naveen Thukral in Singapore and Ivana Sekularac in Amsterdam; Editing by Dale Hudson)