Soybeans Decline as European Debt Crisis Curbs Speculator Demand
Category: Oilseeds
(Bloomberg) – Soybeans dropped the most since January on concern that an intensifying European debt crisis will slow global economic growth, curbing investment demand for commodities as a hedge against inflation.
The dollar extended its longest rally against the euro since 2008 as Greece faced the prospect of becoming the first developing nation to default on its debt. The prospect of slowing demand cooled soybean prices that reached a 45-month high last week as hedge funds made their largest bet on a rally in prices since at least June 2006, government data show.
“The European debt crisis encouraged the funds to cut their long positions,” Chad Henderson, a market analyst for Prime Agricultural Consultants Inc. in Brookfield, Wisconsin, said in a telephone interview. “People are nervous about demand after the rally.”
Soybean futures for July delivery fell 1.9 percent to close at $14.3775 a bushel at 1:15 p.m. on the Chicago Board of Trade, the largest decline since Jan. 30. On May 2, the most-active futures touched $15.125, the highest since July 2008.
Soybeans are the second-largest U.S. crop, valued at $38.9 billion in 2010, behind corn, government data 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
