BLBG:Soybeans Decline to 13-Month Low as Growth Concerns Hurt Demand Outlook
Soybeans fell to the lowest level in more than 13 months as concerns that the global economy may slow, reducing demand for commodities, overshadowed optimism that China may increase imports to meet a shortage.
Soybeans for delivery in January slipped as much as 0.5 percent to $11.425 a bushel on the Chicago Board of Trade, the lowest price since Oct. 8, 2010. The most active contract traded at $11.43 at 2:38 p.m. Singapore time.
The U.S. deficit-cutting congressional supercommittee failed to reach an agreement, setting the stage for automatic cuts in 2013 and fueling concern that economic-stimulus measures that are set to expire will not be renewed. Germany’s Finance Ministry said the country’s expansion has gotten “noticeably slower,” while Moody’s Investors Service said France’s rising financing costs are increasing the nation’s fiscal challenges.
“Concerns around the supercommittee’s prospects of making spending cuts in the U.S. and worries about the sovereign debt in France are certainly going to weigh” on the grain and oilseed markets, Michael Creed, an agribusiness analyst at National Australia Bank Ltd., said by phone from Melbourne today. “It’s just the investors exiting the market.”
Declining prices may encourage China, the world’s largest soybean importer, to boost purchases, taking inbound shipments to as high as 60 million metric tons this season, Abah Ofon, an agricultural commodity analyst at Standard Chartered Bank in Singapore, said in an interview today.
Ofon’s forecast is higher than the U.S. Department of Agriculture’s estimate of 56.6 million tons for the 12 months that began Oct. 1.
‘Opportunistic Buyer’
“It buys opportunistically,” Ofon said. “It buys on dips. It is limited by its own production capacity and ultimately, it relies on outside market to meet its consumption.”
China bought a total of 544,500 tons from the U.S., the USDA said last week, when futures fell for a third week.
Corn for delivery in March was little changed at $6.0475 a bushel in Chicago at 2:30 p.m. Singapore time, paring gains of as much as 0.6 percent earlier.
Rains and thunderstorms covered much of Argentina’s corn, soybean, corn and wheat areas over the weekend, potentially delaying planting, Telvent DTN Inc. said in a report yesterday. In Brazil, soybean areas are forecast to get rains this week, delaying sowing, while benefiting crops that are already planted, Sao Paulo-based Somar Meteorologia said yesterday.
“Certainly, weather issues do have an impact on prices at the moment,” Creed said.
Wheat for March gained as much as 0.6 percent to $6.125 a bushel after declining yesterday to the lowest price since Oct. 4. It traded at $6.0925 at 2:31 p.m. Singapore time.
-- With assistance from Lucia Kassai in Sao Paulo. Editors: Thomas Kutty Abraham, Jarrett Banks
To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
