(Businessweek) – Soybeans touched a six-month high in Chicago on signs demand will increase in China, the world’s biggest importer of the oilseed, even as U.S. supplies shrink before the next harvest.
China’s soybean imports will start increasing sizably from this month and jump 17 percent in the season beginning Aug. 1 to 68 million metric tons, Hamburg-based researcher Oil World said May 21. U.S. supplies before the next harvest will shrink to 125 million bushels, the smallest since 2004, the Department of Agriculture estimates.
“It’s an old-crop market that is extremely tight,” Michael Pitts, a commodity sales director at National Australia Bank Ltd., said by phone from Sydney. “China has been a consistent importer over the year and is likely to continue.”
Soybeans for delivery in July reached $15.025 a bushel on the Chicago Board of Trade, the highest for a most-active contract since Nov. 8, and were little changed at $14.9525 by 5:13 a.m. local time. Futures for delivery in November, after the next harvest, fell 0.2 percent to $12.3625.
Prices rallied to a record $17.89 a bushel in September as U.S. crops were hurt by the worst drought since the 1930s. The USDA expects production to rebound 12 percent from the previous season as fields recover. Still, “there is concern about a lack of soybeans in July and August” in the country before farmers begin collecting the next crop, Oil World said.
Corn for delivery in December, the most-active contract by open interest, fell 0.5 percent to $5.28 a bushel and wheat for delivery in July gained 0.7 percent to $6.93 a bushel. In Paris, milling wheat for delivery in November was unchanged at 206 euros ($265) a ton on NYSE Liffe.
Rough rice for delivery in July added 0.7 percent to $15.45 for 100 pounds in Chicago, heading for a third straight gain. Sales from China’s top producing province slumped amid reports some supplies contained traces of cadmium, state-owned researcher Cngrain.com said May 21. Consumers in some areas may become more willing to buy imported supplies, said Li Qiang, chairman at Shanghai JC Intelligence Co.
