Soybeans Set for Third Monthly Gain as Demand Curbs U.S. Supply

By Jae Hur

May 29 (Bloomberg) -- Soybeans were poised for the third straight monthly advance on speculation that demand from China, the world’s top importer, may reduce inventories of the oilseed in the U.S. amid lower production in South America.

Before today soybeans had advanced 12 percent this month, heading for the largest gain since June 2008. U.S. inventories on Aug. 31, before the harvest, will drop to 130 million bushels (3.5 million metric tons) from 205 million bushels a year earlier, the Department of Agriculture said May 12.

“Soybeans may gain to test the $12 a bushel level before facing a technical correction,” said Toshimitsu Kawanabe, an analyst at Tokyo-based commodity broker Central Shoji Co. “From now, crop weather in the U.S. will be a major factor for seeding of the oilseed as corn planting will finish soon.”

Soybeans for July delivery were little changed at $11.805 a bushel on the Chicago Board of Trade at 11:01 a.m. Singapore time. Before today the contract had advanced 1.1 percent this week, the fifth straight weekly gain and touched $12.0075 a bushel on May 27, the highest since Sept. 25.

U.S. inventories for soybeans represent 4.3 percent of projected annual use, the tightest ratio since 1966, USDA data show. Estimated global production this year will fall to 212.8 million metric tons, compared with a record 221.1 million tons harvested last year, because of smaller crops in South America, the USDA said this month.

Global inventories on Oct. 1, before the Northern Hemisphere harvest, will fall to 42.6 million tons from 53.1 million tons last year, the USDA said.

China Imports

China imported a record 13.9 million tons in the first four months of the year, government data show. China’s imports may exceed 4.5 million metric tons this month and reach 4.2 million tons in June, the National Grain and Oils Information Center said this week.

Corn for July delivery fell 0.4 percent to $4.2725 a bushel at 10:50 a.m. Singapore time. The price, which reached $4.3475 on May 20, the highest since Oct. 9, has gained 5.8 percent this month on speculation planting delays would reduce acreage and yields in the U.S.

July-delivery wheat was 0.5 percent lower at $6.2725 a bushel by 10:50 a.m. Singapore time. Before today the contract had risen 2.9 percent this week, gaining for the second straight week, and added 18 percent this month, set for the largest monthly advance since September 2007.

Wheat reached $6.4625 yesterday, the highest since Jan. 7, on speculation that wet weather in the northern Great Plains will delay spring seeding, forcing U.S. growers to plant alternative crops in some fields.

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