(Bloomberg) – Soybeans rose to the highest in seven months on speculation that rising demand for soy-based animal feed will deplete U.S. supplies before the harvest. Grains declined on improving weather for world crops.
Since Oct. 1, U.S. sales of soybean meal, which accounts for about 48 pounds (22 kilograms) of a 60-pound bushel of soybeans, rose 34 percent to 9.065 million metric tons as of May 23, Department of Agriculture data show. Production last year fell to the lowest since 2008 after the worst drought since the 1930s.
“Soybean meal is leading the rally in soybeans because demand is reducing U.S. inventories,” Roy Huckabay, an executive vice president for the Linn Group in Chicago, said in a telephone interview. “With rain-delayed U.S. planting, it will take longer to get to the harvest. That means tighter supplies ahead of the harvest to make soybean meal.”
Soybean futures for July delivery climbed 0.2 percent to close at $15.32 a bushel at 1:15 p.m. on the Chicago Board of Trade, after earlier touching $15.49, the highest since Nov. 2. July soybean-meal futures jumped 0.8 percent to $455.90 for 2,000 pounds. Earlier the price touched $462, the highest since Nov. 9.
Corn Drops
Corn futures for delivery after the harvest fell for the most in a month in Chicago on speculation that global supplies following the next Northern Hemisphere harvest will be ample, even after excess rain cut sowing in the U.S., the world’s biggest grower and exporter.
U.S. farmers had yet to plant 9 percent of corn crops in the main growing areas as of June 2, the USDA said. Last year, planting was complete by that time. The area sown may be 93.5 million acres, 3.9 percent less than the government’s forecast in March, Morgan Stanley said June 3. That still would leave production at a record 13.3 billion bushels, 23 percent larger than last year’s drought-reduced crop, the bank said.
Corn futures for delivery in December retreated 1.9 percent to $5.4225 a bushel, the biggest decline for a most-active contract since May 6.
Wheat futures for July delivery fell 1.1 percent to $7.015 a bushel in Chicago, the first drop in four sessions.
