(Businessweek) – Soybeans headed for a fourth weekly advance in Chicago, poised for the longest run since February, as sustained demand from China drained U.S. inventories.
China bought 531,000 metric tons of soybeans from exporters in the week ended May 16 for delivery after Sept. 1, the U.S. Department of Agriculture reported yesterday. The Asian nation, the world’s biggest importer of the oilseed, purchased a further 115,000 tons in the following week, according to the USDA.
“The market still seems surprisingly tight,” said Paul Deane, an agricultural economist at Australia & New Zealand Banking Group Ltd. (ANZ) in Melbourne. “Recent sales have been running ahead of what the USDA is forecasting, and that can’t continue. That’s why we’ve seen a squeeze on prices.”
Soybeans for delivery in July fell 0.1 percent to $14.985 a bushel at 5:11 a.m. on the Chicago Board of Trade, closing in on a 3.5 percent gain this week. A fourth weekly increase would match a run of advances through Feb. 1, according to figures compiled by Bloomberg.
Futures gained for a sixth session yesterday, the longest rally since March 2012. The oilseed is up 7.1 percent in May, set for the biggest advance since July, when the worst U.S. drought since the 1930s eroded production. Prices climbed to a record in September.
Inventories before this year’s harvest will drop to the lowest in nine seasons, USDA figures show. Soybean reserves at Aug. 31 will shrink to 125 million bushels, the smallest stockpile since 2004, according to its estimate.
Corn for delivery in December fell 0.6 percent to $5.3175 a bushel and wheat for delivery in July rose 0.3 percent to $7.055 a bushel. Milling wheat for delivery in November traded on NYSE Liffe in Paris slipped 0.1 percent to 207.50 euros ($269.08) a ton.
Trading of oilseed and grain futures in Chicago will be closed May 27 for a national holiday.
