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Soybeans Rise to Three-Week High as China Buys More U.S. Vegetable Oil
Soybean futures rose to the highest level in almost three weeks after a U.S. government report showed increased sales of soybean oil to China, the biggest consumer of the product.
U.S. exporters sold 40,000 metric tons of the commodity to the Asian nation, 21,000 tons to Peru and 29,500 tons to unknown destinations, the Department of Agriculture said today, all for delivery in the marketing year starting Oct. 1. China bought about 80,000 tons last week, three company executives familiar with the transaction said today.
“U.S. crushers discounted prices to make sales,” as they are competing with Argentina and Brazil, said Roy Huckabay, the executive vice president of the Linn Group in Chicago. “China needs more vegetable oils and the sales this past week signal that U.S. supplies are the cheapest in the world right now.”
Soybean futures for November delivery rose 8 cents, or 0.8 percent, to $10.43 a bushel at 11:33 a.m. on the Chicago Board of Trade. Earlier, the most-active futures touched $10.45, the highest level since Aug. 18. The price gained 0.9 percent last week, the fifth gain in six weeks.
Soybean oil for December delivery rose 0.56 cent, or 1.4 percent, to 41.42 cents a pound on the CBOT. Earlier, the price reached 41.45 cents, the highest since Aug. 19. The most-active contract gained 2 percent in the previous three sessions.
China will import a record 9.95 million tons of soybean oil from all suppliers in the next marketing year, up 15 percent from 8.64 million forecast for this year, the USDA said last month. Argentina and Brazil were the biggest exporters last year, according to the department.
China will inspect vegetable oil reserves in Hubei province as a trial project to help gauge the country’s overall stockpiles, the State Administration of Grain said.
The project, starting Sept. 25, will check stockpile volumes and quality as well as the use of government subsidies, the agency said.
The soybean crop in the U.S., the world’s largest grower, was valued at $31.8 billion last year, second only to corn at $48.6 billion, government figures show.
To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net
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