Soybean Futures Rise as USDA Lowers Global Inventory Estimate

By Luzi Ann Javier

Aug. 13 (Bloomberg) -- Soybean futures rose for a third day after the U.S. reduced its estimate on global stockpiles and reported sales of 113,000 metric tons of the American oilseed to China, signaling strong demand for the commodity.

The U.S. Department of Agriculture yesterday cut its estimate for soybean global ending inventories next year to 50.3 million metric tons, down 3 percent from the July forecast of 51.8 million tons, and lowered output projections for the U.S., the world’s biggest grower and exporter, and China.

“The figures coming through just continue to support the higher prices for soybeans,” Ben Barber, a futures adviser at Bell Commodities Ltd., said by phone from Melbourne today.

Soybeans for November delivery gained as much as 1 percent to $10.545 a bushel in after-hours electronic trading on the Chicago Board of Trade, before trading at $10.5225 at 2:35 p.m. Singapore time.

U.S. exporters sold 113,000 tons of soybeans to China, the biggest importer, for delivery in the marketing year beginning Sept. 1, the USDA said yesterday. The total included 58,000 tons earlier reported as being sold to unknown buyers.

Exporters are required in the U.S. to report any transaction of 100,000 tons or more for any commodity sold in one day to a single destination.

The USDA cut its U.S. soybean production forecast by 1.9 percent to 87.1 million tons, or 3.199 billion bushels, in the 2009-2010 marketing year.

China’s Inventories

Next year’s inventory forecast for China was reduced 2.8 percent to 7.06 million tons as excessive moisture in the northeast curbs yields.

“Soybeans may drag corn and wheat prices a little bit higher,” Bell’s Barber said.

Corn for December delivery rose 0.9 percent to $3.3925 a bushel at 2:43 p.m. Singapore time, extending yesterday’s 1.6 percent gain.

Global corn trade will rise faster next year, the USDA said, boosted by import demand in Mexico and Taiwan. The global trade forecast was raised to 84.48 million tons next year, from 81.73 million tons projected in July. That compares with an estimated 80.66 million tons in the 2008-2009 marketing year.

Wheat for December delivery fell as much as 0.7 percent to $5.14 a bushel before trading unchanged at $5.1775 a bushel.

The USDA forecast global wheat inventories next year at 183.56 million tons, up 1.3 percent from its July outlook. The production forecast for the U.S., the world’s biggest exporter, was raised by 3.4 percent to 59.4 million tons, or 2.18 billion bushels, as yields rise.

Korean Purchase

In the export market, South Korea’s Major Feedmill Group purchased 110,000 tons of U.S. corn for feed production through private negotiations yesterday, according to two industry executives who were familiar with the trade. The volume was in addition to the Korea Feed Association’s purchase of 55,000 tons in a tender yesterday.

Corn for May delivery on the Dalian Commodity Exchange gained as much as the 4 percent daily limit from the previous settlement price to 1,736 yuan ($254) a ton, the highest level since Sept. 26, before trading at 1,725 yuan at 2:57 p.m. local time.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net