Soybeans Rise to 28-Month High on China's Import Demand; Corn Prices Gain
Soybean futures rose to a 28-month high as demand rebounded in China, the world’s largest consumer. Corn rose, capping a fifth straight weekly gain as hot, dry weather threatened crops in Argentina. Wheat was little changed.
U.S. exporters sold 827,810 metric tons of soybeans in the week ended Dec. 16, more than nine times the total a week earlier, the Department of Agriculture said today. China purchased 77 percent of last week’s total shipments from the U.S. Sales for delivery in the marketing year that began Sept. 1 are 12 percent higher than a year earlier.
“Export sales improved last week because China returned to the U.S. markets,” said Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis. “Chinese demand will continue to provide support into 2011.”
Soybean futures for March delivery rose 20.25 cents, or 1.5 percent, to settle at $13.60 a bushel at 1:15 p.m. on the Chicago Board of Trade, the highest close since Aug. 1, 2008. Prices gained 3.8 percent for the week and 51 percent since the end of June as China’s demand surged and hot, dry weather reduced U.S. yields.
China’s December soybean imports may be 5.3 million tons, Grain.gov.cn said in e-mailed daily report today. Shipments for January and February are forecast at 5 million tons and 3.5 million tons, respectively, said the unit of the China National Grain & Oils Information Center.
Farm-commodity prices will extend rallies next year, driven by increased demand from emerging markets and higher oil costs, Rabobank Groep NV said in a note on Dec. 21.
South American Crops
Corn and soybeans also rose on concern that hot, dry weather will damage crops in Brazil and Argentina, the biggest exporters after the U.S.
Argentine soybean farmers, the world’s third-largest producers, have planted 74.7 percent of the crop, down from 85.7 percent a year earlier, because of a lack of rain, the Buenos Aires Cereals Exchange said today in a report. Planted acreage may fall to 18.5 million hectares (45.7 million acres) in the current season, from 19 million a year earlier, the exchange said.
Soybeans yields in Brazil’s southern Rio Grande do Sul state may be cut by 20 percent as the La Nina weather pattern produces hot, dry weather next year, forecaster Somar Meteorologia said Dec. 20.
“Corn and soybean markets are adding in weather premium,” said Bill Gentry, a broker at Risk Management Commodities Inc. in Lafayette, Indiana. “If Argentina misses the next rain, it will be like throwing gasoline on a fire,” given the rising demand in China, Gentry said.
Grain Prices
Corn futures for March delivery rose 5 cents, or 0.8 percent, to $6.14 a bushel in Chicago, capping the first six-day gain since Sept. 17. Earlier, prices touched $6.1475, the highest since Nov. 9. Futures advanced 2.9 percent this week and 64 percent since the end of June on speculation that demand for grain-based animal feed and fuel will reduce U.S. inventories.
Wheat futures for March delivery fell 0.5 cent to close at $7.83 a bushel on CBOT, after rallying as much as 0.6 percent to $7.8825, the highest since Dec. 10. The most-active contract gained 3.5 percent this week.
Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, followed by soybeans at $31.8 billion, government data show. The U.S. is the world’s largest grower and exporter of both crops.
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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