COMMODITIES : Prices of Soybean Futures Post 4th Straight Increase

Soybean futures prices bounded higher for the fourth straight session Tuesday, and analysts said an Agriculture Department forecast of a steep drop in U.S. stockpiles would keep the rally from faltering.

In other markets, grain futures were mixed; precious metals advanced; livestock, meat and energy futures were mixed, and stock index futures advanced.

The May soybean contract on the Chicago Board of Trade has gained 21.5 cents a bushel in less than a week, primarily on fears that this spring’s dry weather foreshadows a hot, dry growing season.

The soybean market has been particularly sensitive to weather worries since a USDA report last month predicted that the nation’s soybean stockpile would total a relatively low 290 million bushels on Aug. 31, the end of the current crop year. If that prediction were correct, a poor harvest this fall could lead to tight supplies of soybeans next year.

The USDA released a new report Tuesday afternoon, revising its 1988 soybean carryout estimate to an even lower 275 million bushels. The USDA also predicted a 1989 carryout of just 145 million bushels, well below market estimates of 150 million to 200 million bushels.

Analysts said the numbers were bullish and that futures prices likely would rise again today.

“I think beans will be at least a nickel and probably more towards a dime higher, and we could go higher than that,” said Victor Lespinasse, a trader for Dean Witter Reynolds.

But Cathy Leow, an assistant vice president and soybean analyst at Thomson McKinnon Securities in New York, noted that the USDA numbers were based on farmer surveys conducted before planting even began.

Soybean futures prices have risen more than 50 cents a bushel since the USDA’s March 31 planting intentions report, and Leow said the higher prices probably persuaded farmers to plant more soybeans.

“The odds are that soybean acreage will be higher and (next year’s) soybean ending stocks will also be higher,” she said.

Lespinasse agreed but still predicted that soybean futures prices would rise sharply today.

The USDA also estimated that the 1988 winter wheat harvest at 1.62 billion bushels, up 4% from last year’s harvest and well above the average market estimate of 1.58 billion bushels. The agency predicted a sharp drop in wheat stockpiles, however, which could offset the negative market impact of the high yield estimate.

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