Soybeans Advance to More Than Three-Month High on China Demand

By Luzi Ann Javier

Nov. 20 (Bloomberg) -- Soybeans climbed for a second day to the highest in more than three months on speculation that demand will be sustained from China, the world’s largest buyer.

U.S. exporters sold 1.35 million tons of soybeans in the week ended Nov. 12, 58 percent more than the previous four-week average, the U.S. Department of Agriculture said yesterday. Prices of the oilseed may gain 20 percent by March on rising demand for animal feed and cooking oil in China, the U.S. Soybean Export Council said Nov. 18.

“We’re certainly very long on soybeans,” Jonathan Barratt, managing director at Commodity Broking Services Pty., said. “The demand is certainly there out of China and I think they’re just starting to be felt in their imports and that will continue for some time.”

Soybeans for January delivery gained as much as 1.1 percent to $10.50 a bushel, the highest for the most-active contract since Aug. 13. The contract traded at $10.454 a bushel on the Chicago Board of Trade at 3 p.m. Singapore time, gaining 5.8 percent this week.

About 54 percent U.S. soybean sales in the week ended Nov. 12 were to China, the USDA said yesterday. Separately, the department said exporters sold 116,000 tons of the oilseed to China for delivery in the marketing year that began Sept. 1.

China’s potential market for soybeans could be as much as four times what it is today as the economy continues to grow, Danny Murphy, treasurer of the U.S. Soybean Export Council, said in a Nov. 18 interview in Tokyo.

Chinese soybean use for crushing will grow 7.5 percent from a year earlier to 44.1 million metric tons in the 2009-2010 marketing year, the USDA forecast on Nov. 10.

Corn for March delivery added 0.5 percent to $4.1275 a bushel, a 1.7 percent weekly gain. March-delivery wheat climbed 1 percent to $5.8975 a bushel, a 5.4 percent gain this week.

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