Bloomberg News

Soybeans Gain as Demand for U.S. Crops May Increase; Corn Falls

March 29, 2012

Soybeans, poised for the biggest gain in five quarters in Chicago, rose on speculation demand for U.S. supplies from importers led by China will strengthen as a drought cuts South American production. Corn fell.

The U.S. soybean balance will be in deficit as farmers see a limited gain in acreage amid rising exports after the drought hurt South American crops, Goldman Sachs Group Inc. said yesterday. The U.S. Department of Agriculture is set to release the survey of planting intentions tomorrow.

“If you take South America out of the equation, China has to go to the more expensive supplier, which is the U.S.,” Michael Creed, an agribusiness economist at National Australia Bank Ltd., said by phone from Melbourne. “China is certainly a key swing factor in the global grain and oilseed complex.”

Soybeans for May delivery climbed 0.2 percent to $13.705 a bushel on the Chicago Board of Trade by 2:15 p.m. Paris time, paring an increase of as much as 0.7 percent. The oilseed has advanced 13 percent this quarter.

Southern Hemisphere soybean output will fall 12 percent to 121.5 million metric tons this year, researcher Oil World forecast this week. Shipments of the oilseed to China, the biggest global soybean importer, will jump 6.3 percent in the 2011-12 season, it said.

U.S. farmers will sow 75 million acres of soybeans, similar to the previous year, while the area seeded with corn will jump to 94 million acres from 91.9 million acres, the USDA forecast last month.

Corn for May delivery slid 0.9 percent to $6.1475 a bushel, headed for a fourth drop in a row. The grain, also used to make ethanol in the U.S., has declined 4.9 percent this quarter.

Ethanol production in the U.S. fell 0.5 percent to 889,000 barrels a day last week, with output dropping to the lowest since Oct. 7, the Energy Department reported yesterday.

Wheat for May delivery fell 0.2 percent to $6.2925 a bushel. The grain has dropped 3.6 percent this quarter. Milling wheat for November delivery traded on NYSE Liffe in Paris slipped 0.1 percent to 202 euros ($268) a ton.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

To contact the editor responsible for this story: Jake Lloyd-Smith at jlloydsmith@bloomberg.net


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