BLBG: Soybeans Drop on Speculation Demand for U.S. Supplies May Wane
By Jae Hur and Sungwoo Park
March 24 (Bloomberg) -- Soybeans declined on speculation that the dollar’s strength and bumper harvests in South America may reduce demand for U.S. supplies after the price advanced to a one-month high. Corn and wheat fell.
May-delivery soybeans dropped as much as 0.9 percent to $9.595 a bushel on the Chicago Board of Trade and traded at $9.60 a bushel at 3:43 p.m. Seoul time. The most-active contract touched $9.765 a bushel yesterday, the highest price since Feb. 23. The dollar advanced as much as 0.5 percent against a basket of six major counterparts, making U.S. supplies more expensive to importers holding other currencies.
“The strong dollar and more supplies from South America have made U.S. soybeans less attractive to overseas buyers, especially China, putting downward pressure on the Chicago futures,” said Toshimitsu Kawanabe, an analyst at Tokyo-based commodity broker Central Shoji Co.
The combined soybean harvest this year in Brazil and Argentina, the two biggest exporters after the U.S., will jump 35 percent, boosting global stockpiles 44 percent to the second- highest level ever before the U.S. harvest begins, the U.S. Department of Agriculture estimated.
U.S. soybean farmers will increase planting this year to a record 78.629 million acres, up from the 77.451 million acres that the government says was sown in 2009, Memphis, Tennessee- based researcher Informa Economics Inc. said March 19 in a report to clients. In January, the company said acreage would rise to 77.919 million.
Corn for May delivery dropped 0.6 percent to $3.605 a bushel at 3:34 p.m. Seoul time. The price slumped 2.2 percent yesterday, the biggest decline since Feb. 3.
Wheat for May delivery fell 0.5 percent to $4.745 a bushel after losing 2 percent yesterday, the biggest drop since March 4, as a government report showed improving crop conditions in Kansas, the biggest grower of winter varieties. The price has slumped 12 percent this year, partly because of higher global production and slack demand for U.S. supplies.
To contact the reporters on this story: Jae Hur in Tokyo at jhur1@bloomberg.netSungwoo Park in Seoul at spark47@bloomberg.net.
