Soybeans Rise as Holidays May Boost China's Consumption Outlook

By William Bi

Aug. 29 (Bloomberg) -- Soybeans gained on the expectation demand in China, the world's biggest vegetable oil consumer, will rise in the lead up to two of the country's biggest holidays, spurring imports of the oilseed.

Consumption of vegetable oil will jump in the lead up to the mid-autumn festival and the National Day holidays, as bakeries sell traditional oil-rich moon cakes and consumers buy bottles of cooking oil to give as gifts, said Fu Qiang, a Beijing-based research manager of CGOC Futures Co.

``Stronger Chinese soybean oil prices are helping boost Chicago futures,'' and Chinese soybean oil prices may have also gained as speculation the government may cut edible oil import tariffs abated, Fu said. A reduction would have spurred imports of oil, dampened local prices and reduced processing of beans.

Soybeans for November delivery gained as much 0.8 percent to $13.34 a bushel in after-hour electronic trading on the Chicago Board Trade. It traded at $13.29 a bushel at 4:34 p.m. in Beijing. Futures have risen 12 percent from a 4-month low set on Aug. 11.

Chinese importers may have ordered about four to six cargoes of soybeans this week, each weighing about 60,000 tons, Shanghai JC Intelligence Co. wrote today in an e-mail.

On China's Dalian Commodity Exchange, soybean oil rose for the first time this week. The contract for January delivery gained 1.3 percent to close at 9,120 yuan ($1,333) a ton. The most active soybean contract fell 0.2 percent to 4,263 yuan.

Indian Crop

India, the world's biggest grower of rice after China, may harvest a record crop for a second straight year after monsoon rains increased plantings.

Farmers sowed the crop on 32.5 million hectares (80 million acres) on Aug. 22, 7 percent more than a year earlier, according to the farm ministry. Production last year was a record 96.43 million tons, said the ministry.

Rough rice for November delivery gained 1.6 percent to $18.790 per 100 pounds at 4:48 p.m. in Beijing. Futures surged 82 percent in the past year as adverse weather reduced global output.

Corn for December delivery fell 1.8 cents, or 0.3 percent, to $5.86 per bushel. December-delivery wheat fell 2 cents, or 0.3 percent, to $8.09 a bushel.

Dry conditions in Heilongjiang, China's biggest grower of soybeans, have been relieved after a recent rains, the China National Grain and Oils Information Center said today in an email.

To contact the reporter on this story: William Bi in Beijing at wbi@bloomberg.netPratik Parija in New Delhi at pparija@bloomberg.net.