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Soybean Futures
Soybeans Head for 4th Weekly Gain as China Demand Shrinks Stocks
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May 24th, 2013
Soybean futures headed for a fourth weekly advance in Chicago, poised for the longest run since February, as sustained demand from China drained U.S. inventories.
China bought 531,000 metric tons of soybeans from exporters in the week ended May 16 for delivery after Sept. 1, the U.S. Department of Agriculture reported yesterday. The Asian nation, the world’s biggest importer of the oilseed, purchased a further 115,000 tons in the following week, according to the USDA.
“The market still seems surprisingly tight,” said Paul Deane, an agricultural economist at Australia & New Zealand Banking Group Ltd. (ANZ) in Melbourne. “Recent sales have been running ahead of what the USDA is forecasting, and that can’t continue. That’s why we’ve seen a squeeze on prices.”
Soybeans futures for delivery in July fell 0.1 percent to $14.985 a bushel at 5:11 a.m. on the Chicago Board of Trade, closing in on a 3.5 percent gain this week. A fourth weekly increase would match a run of advances through Feb. 1, according to figures compiled by Bloomberg.
Futures gained for a sixth session yesterday, the longest rally since March 2012. The oilseed is up 7.1 percent in May, set for the biggest advance since July, when the worst U.S. drought since the 1930s eroded production. Prices climbed to a record in September.
Inventories before this year’s harvest will drop to the lowest in nine seasons, USDA figures show. Soybean reserves at Aug. 31 will shrink to 125 million bushels, the smallest stockpile since 2004, according to its estimate.
Corn for delivery in December fell 0.6 percent to $5.3175 a bushel and wheat for delivery in July rose 0.3 percent to $7.055 a bushel. Milling wheat for delivery in November traded on NYSE Liffe in Paris slipped 0.1 percent to 207.50 euros ($269.08) a ton.
Trading of oilseed and grain futures in Chicago will be closed May 27 for a national holiday.
- Phoebe Sedgman in Melbourne at Bloomberg.
By Jeff Wilson and Whitney McFerron - Mar 15, 2011
Soybean futures and corn tumbled the maximum allowed on the Chicago Board of Trade and wheat plunged the most in seven months on concern that the earthquake and nuclear crisis in Japan will reduce raw-material demand.
Equities in Japan had the biggest two-day drop since the 1987 crash as the risk of radiation leaks north of Tokyo escalated. U.S. Treasuries surged. Japan is the world’s leading buyer of corn, the third-largest importer of soybeans and the fifth-biggest purchaser of wheat.
“Increasing levels of radiation have people dumping positions in stocks and commodities and piling assets into cash,” said Alan Brugler, the president of Brugler Marketing & Management LLC in Omaha, Nebraska. “There’s increased risk aversion until the situation stabilizes in Japan.”
Corn futures for May delivery fell by the CBOT limit of 30 cents, or 4.5 percent, to close at $6.36 a bushel at 1:15 p.m., the lowest since Jan. 20.
Soybean futures for May delivery declined the 70-cent maximum, or 5.2 percent, to close at $12.70 a bushel, the lowest since Dec. 13.
Wheat futures for May delivery dropped 53 cents, or 7.4 percent, to close at $6.6775 a bushel in Chicago, the biggest decline since Aug. 6.
Oats fell the 20-cent maximum to a six-month low, while rice and soybean-oil futures also fell by the exchange limits in Chicago.
Shipments into Kashima and other ports on Japan’s east coast were stopped because of power outages after the 9.0- magnitude earthquake and tsunami, Zen-Noh, Japan’s largest corn buyer, said yesterday. Japan said today it plans to buy 32,381 metric tons of wheat in a tender on March 17, 76 percent less than it purchased last week.
Screen Imports
Asian countries moved to screen food imports from Japan following explosions at the Fukushima nuclear plant that raised radiation levels at the complex to harmful levels.
South Korea, Indonesia, Thailand, Malaysia, Singapore and the Philippines took steps to check fruit, vegetables, meat and seafood from Japan for nuclear material.
“It’s a fear-driven trade” focused on Japan, said Frank Cholly Sr., a senior strategist at Lind-Waldock, a broker in Chicago. “Demand is going to slow down, because even though they need to eat, they have more urgent things. They’ve got to stop the radiation leak, and they’ve got to find any survivors.”
Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, government figures show. Wheat is the fourth-largest, behind hay, at $13 billion.
- Jeff Wilson and Whitney McFerron in Chicago at Bloomberg.
