Soybeans Fall Most This Month as China May Slow Oilseed Imports

Soybeans fell the most this month on speculation that China’s efforts to curb inflation will slow economic growth, reducing demand for food, fuel and animal feed made from imported oilseeds.

A benchmark stock index in China fell to a six-month low on concern that government measures to cool the property market will damp consumer spending. China is the biggest consumer of soybeans. The U.S., Brazil and Argentina, the largest exporters, will harvest record crops, boosting global reserves to the highest ever on Oct. 1, the U.S. Department of Agriculture said.

“The drop in Chinese stocks to a six-month low today is something the markets are starting to pay attention to,” said Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana. “China was a precursor to the global collapse in 2008 and bottomed before the recovery in 2009.”

Soybean futures for July delivery fell 16 cents, or 1.6 percent, to $9.93 a bushel on the Chicago Board of Trade, the biggest decline for a most-active contract since March 31. Yesterday, soybeans reached $10.20, the highest price since Jan. 11.

Prices also were driven lower by a government report that showed soybean planting in some southern states was ahead of the five-year average pace, increasing the yield potential, Gerlach said.

The early planting means crops will be harvested in August. Inventories will reach 190 million bushels on Aug. 31, up from 138 million last year, the second-lowest since 1977, the USDA said earlier this month.

The government is scheduled to release its next report on planting progress on May 3.

More Acreage

Soybeans were planted on 24 percent of intended acreage in Arkansas, the 10th-largest producer, above the five-year average of 15 percent, the government said yesterday in a report. Planting was 60 percent completed in Mississippi, the 13th- largest grower, up from 48 percent on average the prior five years.

“Rapid planting of both crops means we will have more soybeans and an earlier harvest,” Gerlach said.

Soybeans are the second-biggest U.S. crop, behind corn, with a 2009 value of $31.8 billion, government figures show.

Jeff Wilson
Source: Bloomberg