Soybeans Rises to Three-Month High on China Food-Demand Gains

Soybeans rose for a third day, reaching a three-month high, on speculation that China will increase purchases of U.S. supplies to make cooking oil for a growing population and livestock feed to produce pork.

China, which suspended soybean-oil imports from Argentina more than a week ago, won’t resume purchases until producers “increase the quality and safety of the product,” the official Xinhua News Agency said today, citing Jiang Yaoping, the vice minister of commerce. Demand for soybean meal in China, will rise as farmers expand hog herds, the country’s National Grain & Oils Information Center said.

“It’s all about rising Chinese demand for U.S. soybeans,” said Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa. “The trend is definitely higher.”

Soybean futures for July delivery rose 9 cents, or 0.9 percent, to $10.15 a bushel on the Chicago Board of Trade, after earlier touching $10.1575, the highest level for the most-active contract since Jan. 11.

U.S. exporters reported 308,600 metric tons of soybeans were sold in the week ended April 15, including 128,700 tons to China, the U.S. Department of Agriculture said today in a report. Sales rose 51 percent above the average of the prior four weeks, USDA data show.

U.S. exporters sold 571,000 tons of the oilseed for delivery after Sept. 1, USDA said in separate reports the past three days.

China may increase soybean imports from all sources by 5.8 percent to 43.5 million metric tons in the marketing year that ends Sept. 30 from the previous year, the USDA said earlier this month. Imports have more than doubled in the past six years, department data show.

“China just keeps buying U.S. soybeans” because of the trade dispute with Argentina, Roose said.

The U.S. soybean crop was valued at $31.8 billion last year, second only to corn, government figures show.

Jeff Wilson
Source: Bloomberg