Chicago soybeans extend rise as rain slow Brazil harvest

15:59, March 03, 2011      

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Chicago soybeans further hiked on Wednesday, as market concerned that rain in parts of Brazil may delay the harvest and cause flooding, hurting the crop's quality. Wheat also inched up, but corn lost ground as weekly ethanol production dropped.

The most active corn contract for May delivery closed at 7.215 U.S. dollars per bushel, down 14 U.S. cents, or 1.9 percent. May wheat rose one cent, or 0.12 percent, to 8.1125 dollars per bushel. May soybean hiked 19 cents, or 1.4 percent, to 13.9425 dollars per bushel.

Weather forecast indicated that Brazil' s Mato Grosso state may have showers and thunderstorms through the weekend after getting as much as 22 millimeters of rainfall, which may disrupt the harvest and cause some flooding.

Brazil country is the world's second-largest soybean producer after the U.S.

Market analysts said that the return of the rains has caused a slight delay in the progress of harvesting work, which added to the firmness of the oilseed markets.

Five days of above-normal rainfall have prevented trucks from unloading soybeans and corn at Paranagua, Brazil's second-largest port, and the line of waiting cargo even extended 20 kilometers.

Meanwhile, the corn market suffered drastic correction as a weekly report showed that ethanol production for the week ending Feb.25 declined 0.68 percent from the prior week, arriving at a 882,000 barrels per day on average.

Traders said that active selling from funds was seen as a force to drive the market lower into the mid-session and a lack of new buying interest on the break have added to the weakness.

As for wheat, the market traded on both sides of Tuesday's closing price. While traders saw the weather outlook in the U.S. as supportive, sharp break in corn was a negative force to pressure the market.

Source: Xinhua

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