Soybean Futures Post Biggest Monthly Increase Since July

Soybean futures rose, capping the biggest monthly rally since July, as export demand drove U.S. supplies to a nine-year low. Animal feed made from the oilseed posted the longest run of weekly gains since 1987.

On the Chicago Board of Trade, soybean futures for July delivery gained 1 percent to settle at $15.10 a bushel at 1:15 p.m. In May, the price climbed 7.9 percent. The commodity rose for the fifth straight week, the longest rally since August. The U.S. was the world’s top producer last year,

Export sales of soybean meal rose 21 percent to 149,146 metric tons in the week ended May 23 from a week earlier, and since Oct. 1, they have gained 34 percent from a year earlier, U.S. Department of Agriculture data showed today. Reserves as of Aug. 31 will shrink to 125 million bushels, the lowest since 2004, the agency said on May 10. As a percentage of consumption, inventories will be the smallest since at least 1961 after the worst drought in 70 years damaged crops in 2012.

“Soybean-meal demand is not slowing, and that means more demand for soybeans,” Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview. “Supplies are tight, and prices are not high enough” to curb consumption, he said.

Soybean-meal futures for July delivery advanced 1.5 percent to $447.20 for 2,000 pounds. The price climbed for the eighth straight week, the longest rally since May 1987. The monthly increase of 7.9 percent was the most since July.

German Export

In the week ended May 23, outstanding soybean sales increased to 4.6 percent 12.3 million tons from a week earlier, USDA data showed. Today, exporters reported sales of 30,000 tons of soybean oil to Germany, a sign of tightening vegetable-oil supplies in Europe after reduced production of rapeseed and sunflower seeds, Anne Frick, the senior oilseed analyst at Jefferies Bache LLC, said in a report.

“It already will be very tight running through to the new crop, but if export sales were to continue at the recent pace, then it will get incredibly tight,” said Paul Deane, an agricultural economist at Australia & New Zealand Banking Group Ltd. in Melbourne.

Corn is the biggest U.S. crop, valued at $77.4 billion in 2012, followed by soybeans at $43.2 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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