GRAINS-US soy eases on profit-taking after rising to 3-1/2 month peak
* Soybean demand shifting to U.S. from South America
* Dry Argentine weather also supportive for prices
* Wheat and corn follow soybeans higher
(New throughout, updates prices and market activity to reflect downturn in soybeans) CHICAGO, Feb 22 (Reuters) - U.S. soybean futures eased on Friday on profit-taking that pulled prices off a 3-1/2 month peak hit during a session that saw early buying as top soybean importer China increased purchases from the United States and Brazilian port workers went on strike. Soybeans were still up 4 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 held tepid gains, recouping some of the last session's deep losses, and 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 advances but the market was choppy on end-of-week positioning. Corn and soybeans also found underpinning 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 11:06 a.m. CST (1704 GMT), Chicago Board of Trade March soybeans were down 2 cents per bushel at $14.85-3/4, March wheat was up 3 at $7.24-1/4 and March corn was up 1-1/2 at $6.92-1/4.
BUSINESS SHIFTING Traders said the issues in South America continued to shift soybean business to the United States, a key factor in the market's early rise above key psychological resistance at the $15 per bushel level. 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 11:09 a.m. CST (1709 GMT)
LAST NET PCT YTD CHG CHG CHG CBOT corn 692.25 1.50 0.2% 7.1% CBOT soy 1486.00 -1.75 -0.1% 24.0% CBOT meal 439.60 2.30 0.5% 42.1% CBOT soyoil 50.66 -0.65 -1.3% -2.7% CBOT wheat 725.00 3.75 0.5% 11.1% CBOT rice 1571.00 -12.50 -0.8% 7.6% EU wheat 242.50 0.00 0.0% 19.8%US crude 92.90 0.06 0.1% -6.0% Dow Jones 13,953 72 0.5% 14.2% Gold 1572.80 -2.86 -0.2% 0.6% Euro/dollar 1.3174 -0.0014 -0.1% 1.8% Dollar Index 81.4830 0.0220 0.0% 1.6% 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)