Soybeans Rise, Heading for 5th Weekly Gain on Demand from China

By Jae Hur

Jan. 9 (Bloomberg) -- Soybeans advanced for the first time in three days and are poised for the fifth straight weekly gain on strong demand from China and concern that dry weather in South America may hurt crops. Corn and wheat also rose.

U.S. exporters reported sales for delivery before Aug. 31 of 529,694 metric tons in the week ended Jan. 1, up 3.7 percent from a week earlier, government data show. China has boosted purchases 21 percent in the first four months of the marketing year. Exporters said yesterday that China bought 120,000 tons, on top of 347,000 tons purchased since Jan. 1.

“Strong export demand from China, yet again, is pushing soybeans to the upside,” said Akhilesh Kamkolkar, head of futures at Halifax Investment Services in Sydney. “South American dry weather concerns have provided soybeans with much fundamental strength.”

Soybeans for March delivery added as much as 3 percent to $10.1950 a bushel in after-hours trading on the Chicago Board of Trade and was at $10.1525 at 4:36 p.m. in Singapore. The price has risen 3.9 percent this week.

Corn for March delivery increased as much as 2 percent to $4.1475 a bushel and last traded at $4.135. The price reached $4.29 on Jan. 6, the highest since Oct. 30.

Soybeans and corn were supported by speculation that expected rain in the coming days may not be enough to improve crops threatened by dry weather the past month in Brazil and Argentina, said Tomokazu Amano, chief of the research team at Mitsubishi Crop.

Crude oil rose as much as 2.4 percent after falling in the past three days. The euro traded at $1.3653 from $1.3724 late yesterday in New York.

Wheat Gains

Wheat for March delivery advanced as much as 1.7 percent to $6.23 a bushel and traded at $6.20 by 4:30 p.m. Singapore time. The contract has gained 1.5 percent this week, extending a rally for the fifth straight week.

Wheat farmers in the U.S., the biggest exporter of the grain, planted the fewest acres of winter varieties in three years after exports fell and prices plunged, analysts said.

The Department of Agriculture on Jan. 12 will probably estimate that U.S. farmers planted about 44.056 million acres of winter wheat from September through November, down 4.6 percent from a year earlier, based on the average estimate of 11 analysts surveyed by Bloomberg News. Much of the drop will be in soft-red wheat as heavy rains delayed corn and soybean harvests and disrupted fieldwork.

In a separate report on Jan. 12, the USDA is likely to reduce its estimates of last year’s corn and soybean harvests because June flooding reduced yields, analysts in the survey said. Wet weather from North Dakota to Ohio in September and October and snows in November also may have damaged crops that had yet to be harvested, the analysts said.

To contact the reporter on this story: Jae Hur in Tokyo at jhur1@bloomberg.net