BLBG: Soybeans Fall as Report Shows Lower Feed, Cooking-Oil Demand
By Jeff Wilson
May 14 (Bloomberg) -- Soybeans fell, capping the first three-week decline since early February, after an industry report showed an unexpected decline in demand from U.S. processors in April.
Consumption fell 12 percent to 131.7 million bushels from March and dropped 1.8 percent from a year earlier, the National Oilseed Processors Association said in a report today. Traders surveyed by Bloomberg News expected 137.1 million, on average. Member firms reported inventories of cooking oil rose 3.8 percent to 2.81 billion pounds from a year earlier.
“Crush demand moved from near-record large in March to the low end of the five-year range in April,” Lewis Hagedorn, a commodity strategist for JPMorgan Chase & Co., said today in a note to clients. “Far lower implied oil demand during the month appears to signal a resumption of the trend of inventory builds witnessed most of this marketing year.”
Soybean futures for July delivery fell 11 cents, or 1.1 percent, to $9.535 a bushel on the Chicago Board of Trade. For the week, the price slipped 0.7 percent, the third straight decline. Soybeans are down 9.1 percent this year on forecasts of record production in Brazil and Argentina, the two biggest exporters after the U.S.
Prices also fell on concern that Europe’s debt crisis will worsen, hampering the global economy and curbing demand for soy- based foods, animal feed and cooking oil.
Euro Breakup
Former Federal Reserve Chairman Paul Volker said Greece’s fiscal woes may cause the breakup of the euro area after an unprecedented $1 trillion bailout. Global equity markets fell and the Reuters/Jefferies CRB Index of 19 commodities slipped to a three-month low.
“The European crisis has the potential to slow demand in China,” the biggest buyer of soybeans, said Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis. “Traders are nervous about the health of the world economy.”
The soybean crop in the U.S., the world’s largest grower, was valued at $31.8 billion last year, second only to corn at $48.6 billion, government figures show.
To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net
