Soybeans Rally to 16-Month High After China Boosts Imports of U.S. Supply

Soybeans surged to a 16-month high after U.S. exporters boosted sales to China, the world’s biggest consumer and importer.

U.S. exporters sold 180,000 metric tons to China for delivery in the marketing year that began Sept. 1, the U.S. Department of Agriculture said. China has purchased 420,000 tons from the U.S. this week, USDA data show. Soybean futures on the Dalian Commodity Exchange have risen 16 percent in the past year in dollar terms to the equivalent of $17.33 a bushel, a 43 percent premium to U.S. futures in Chicago.

“The Chinese are buying $12 U.S. soybeans to sell into a” domestic market where prices a higher, said Jerry Gidel, a market analyst for North American Risk Management Services Inc. in Chicago. “Chinese demand is very strong for feed and vegetable oils” made from soybeans, Gidel said.

Soybean futures for November delivery rose 20.25 cents, or 1.7 percent, to $12.1175 a bushel at 10:10 a.m. on the Chicago Board of Trade, heading for the biggest gain since Oct. 12. Earlier, the price reached $12.1525, the highest level since June 5, 2009. Before today, the commodity gained 32 percent since June 30 on speculation that hot, dry weather reduced U.S. yield potential.

Soybeans also rose on increasing investor demand as a decline in the dollar boosted the appeal of commodities as an alternative to assets priced in the U.S. currency, Gidel said. The dollar fell the most since July 1 against a basket of six major currencies on speculation that the Federal Reserve will ease monetary policy further to spur economic growth.

“The dollar’s decline is supporting new fund investment,” Gidel said.

The soybean crop in the U.S. 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

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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