Oct. 20 (Bloomberg) -- Soybeans surged to a 16-month high after U.S. exporters boosted sales to China, the world’s biggest consumer and importer.
U.S. shippers 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 42 percent premium to U.S. futures in Chicago.
“The Chinese are buying $12 U.S. soybeans to sell into a” domestic market where prices are 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 32.25 cents, or 2.7 percent, to close at $12.2375 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest gain since Oct. 8. Earlier, the price reached $12.2575, the highest level since June 5, 2009. The commodity has gained 36 percent since June 30 on speculation that hot, dry weather reduced U.S. yield potential.
U.S. soybeans inspected for export rose 22 percent to 59.384 million bushels in the week ended Oct. 14, compared with a week earlier, the USDA said. Shipments since Sept. 1 are 67 percent higher than at the same time a year earlier.
As of Oct. 7, total sales of soybean oil for delivery in the year ending Sept. 30 were up 8.6 percent compared with the same period a year ago, the USDA said last week. The commodity is used to make cooking oils, margarine and food products.
“Chinese purchases today sent the message that demand will not slow” after China yesterday raised interest rates for the first time in three years, said Bill Nelson, a senior economist at Doane Advisory Services Co. in St. Louis. “Rising Chinese meat production and vegetable-oil demand” are driving soybean imports to a record, Nelson said.
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, North American Risk Management’s 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 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 email@example.com
To contact the editor responsible for this story: Steve Stroth at firstname.lastname@example.org.