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Soybean Futures Special Report
Soybean Futures Drop From 20-Week High as Crisis Concerns Eclipse Chinese Buying
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February 16th, 2012
Soybean futures fell from a 20-week high in Chicago as European leaders remained divided over a bailout for Greece, overshadowing indications demand is set to remain steady in China, the biggest importer.
Global stocks slid and the euro weakened after a decision slated for yesterday on Greek aid was postponed to Feb. 20. China signed agreements yesterday valued at $4.3 billion to buy 8.62 million metric tons of U.S. soybeans during a five-day visit by Vice President Xi Jinping.
“It’s broader markets, not fundamentals,” that are pushing prices lower, Erin FitzPatrick, an analyst at Rabobank International in London, said by phone. “There have been strong U.S. bean sales this week and not much improvement to Brazilian weather.”
Soybeans futures for May delivery dropped 0.6 percent to $12.6175 a bushel by 1:15 p.m. London time on the Chicago Board of Trade. The oilseed yesterday reached $12.765, the highest price for a most-active contract since Sept. 27. Brazil is the world’s second-biggest soybean exporter after the U.S.
The delay in the Greek rescue “is negative for risk assets, which includes commodities,” Adam Davis, a trader at Merricks Capital Services Pty Ltd., said by e-mail. Soybeans need “a fresh catalyst to go much higher” after yesterday touching a level at which sell orders may be clustered, he said.
Corn futures for May delivery declined 0.4 percent to $6.2875 a bushel. The grain slid for a third day and has lost 1.6 percent this month.
Wheat futures for delivery in May dropped 0.2 percent to $6.33 a bushel. The grain fell for a seventh session in eight. Milling wheat for delivery the same month traded on NYSE Liffe in Paris declined 0.5 percent to 204.50 euros ($265.87) a ton.
- Luzi Ann Javier in Singapore and Tony C. Dreibus in London 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.
