Soybean Meal Plunges as India Says Exports May Rise to Record

By William Bi

Aug. 8 (Bloomberg) -- Soybean meal in Chicago slumped after India, Asia's biggest supplier of the livestock feed, said it may ship a record quantity next year after rain in the biggest growing regions encouraged increased soybean planting.

Exports of meal in the year starting October may surpass the 5 million metric ton estimate for this year, the Soybean Processors Association of India said.

``Indian soybean meal can be competitive as a cheaper alternative'' to importing soybeans or soybean meal from the U.S., said Li Gang, program manager at Jilin Grain Group Co. by phone from Dalian. ``Around the world grain output is gaining.''

Soybean meal for December delivery dropped as much as $4.20, or 1.3 percent, to $328.50 per ton, in after-hours electronic trading on the Chicago Board Of Trade. It was at $330.30 a ton at 12:11 p.m. in Beijing. The contract has slumped 26 percent from a record $445.70 on July 3, on concerns higher grain costs will reduce livestock production.

Soybeans and corn also fell after posting early gains on speculation global grain stockpiles will expand following a surge in planting around the world.

Soybean export sales for delivery before the end of August jumped 38 percent, while exports of corn rose more than fivefold, the Department of Agriculture said yesterday. Commodity shipping costs are down 36 percent from a record in May.

``While demand will emerge as prices drop, the market is trying to determine how far they may drop before the expected gains in South America's planting will be affected,'' Li said. ``Some believe we have yet to reach the bottom.''

Soybeans Drop

Soybean futures for November delivery fell as much as 9 cents, or 0.7 percent, to $12.30 a bushel on the Chicago Board of Trade and traded at $12.3225 at 12:22 p.m. in Beijing.

Soybeans yesterday surged 1.4 percent after touching $11.99 on Aug. 6, the lowest in four months. The most-active contract is down 25 percent from the all-time high of $16.3675 on July 3.

Corn futures for December delivery fell as much as 3 cents, or 0.6 percent, to $5.39, on the Chicago exchange, and last traded at $5.415 a bushel. In the five sessions ended Aug. 6, the price fell 15 percent, the most since July 1988.

Wheat fell after ProFarmer Australia said production in Australia, forecast to be the world's third-largest exporter, may exceed a government prediction after rainfall in July and farmers sowed a record crop.

December-delivery wheat fell as much as 10.25 cents, or 1.2 percent, to $8.3675 a bushel on the Chicago Board of Trade, and last traded at $8.395. Prices are down 38 percent from the record $13.495 a bushel reached on Feb. 27 in part on expectations bigger crops in countries including Australia would boost global supplies.

To contact the reporter on this story: William Bi in Beijing at wbi@bloomberg.net