(Businessweek) – Soybeans gained, extending a fifth weekly advance, as sustained demand from China shrinks U.S. stockpiles to the lowest in nine years. Wheat declined.
The oilseed for July delivery climbed as much as 0.8 percent to $15.08 a bushel on the Chicago Board of Trade and was at $15.0625 by 10:37 a.m. in Singapore. Prices are up 7.7 percent in May, the biggest monthly gain since July, when the worst U.S. drought since the 1930s eroded production and sent soybeans to a record $17.89 a bushel in September.
Limited U.S. soybean supplies as well as export sales and planting delays have helped prop up prices, according to Oil World. China’s soybean imports may jump 19 percent in May and June from a year earlier, after falling in the first four months of 2013, the researcher said May 28. U.S. reserves on Aug. 31 will shrink to 125 million bushels, the lowest since 2004, the U.S. Department of Agriculture estimates.
“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. The USDA is set to release its latest report on export sales today.
Citigroup Inc. this week raised its price forecast for old-crop soybeans to $14.35 a bushel in the second quarter, citing short-term tightness and supply sourcing constraints.
Wheat for July delivery dropped as much as 0.7 percent to $6.9375 a bushel and was at $6.98, set to decline 4.5 percent in May. Prices slumped as much as 2.2 percent yesterday after Japan suspended imports of some varieties from the U.S., where the government discovered an unapproved, genetically modified strain growing in an Oregon field. South Korea said it will increase inspection of feed wheat imports from the U.S.
Corn for December delivery advanced 0.3 percent to $5.645 a bushel after dropping as much as 0.9 percent. Prices have gained 5.1 percent this week.
