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Soybeans rise on strong demand

11/14/2012 @ 3:45pm

U.S. soybean futures rose Wednesday, rebounding from sharp declines earlier in the week as lower prices for the oilseed rekindled strong demand from domestic processors and foreign importers.

An export sale to China and a strong report on domestic soybean crushing boosted futures Wednesday.

Soybeans for January delivery climbed 11 cents, or 0.8%, to $14.19 a bushel at the Chicago Board of Trade.

"The bottom line is demand is not backing off, particularly at lower prices," said Darin Newsom, senior market analyst with Telvent DTN, an agriculture media company in Omaha, Neb.



Soybean futures sank near five-month lows earlier in the week, and were down 20% from their nominal record closing high of $17.71 a bushel in early September. The declines were driven by U.S. government forecasts last week projecting higher domestic production of soybeans this fall than analysts had expected.

But the lower futures prices uncovered fresh bargain hunting from users of physical soybeans such as grain-processing giants.

The U.S. Department of Agriculture said private exporters reported sales of 120,000 metric tons of soybeans for delivery to China for the current marketing year, which began Sept. 1. Robust U.S. soybean export demand, particularly from China, has been a key driver of previous advances in soybeans.

Also Wednesday, a report showed U.S. soybean crushers processed more soybeans last month than analysts generally had expected. The National Oilseed Processors Association said 153.5 million bushels of soybeans were crushed in October, above the average estimate of 144.4 million from analysts surveyed by Dow Jones Newswires.

"The recent demand news rekindled worries that demand will continue to outstrip U.S. supplies through February," said Mike Zuzolo, president of Global Commodity Analytics and Consulting in Lafayette, Ind. "One thing is for sure, we will not ration soybean demand at lower prices."

Tight global soybean supplies are expected to keep world importers looking to U.S. stockpiles to fulfill demand needs until South American farmers harvest their crops next spring.

U.S. wheat futures were mixed Wednesday, with most contracts higher on concerns about poor winter-wheat crop conditions in the Great Plains. The USDA, in a report released Tuesday afternoon, revealed dryness issues continue to stress hard red-winter crops from Oklahoma to Texas.

December wheat futures ended down 2 1/4 cents, or 0.3%, to $8.48 3/4 a bushel at the Chicago Board of Trade. Kansas City Board of Trade December wheat rose two cents, or 0.2%, to $8.89 3/4 a bushel. MGEX December wheat finished up 1 1/4 cents, or 0.1%, at $9.23 1/2 a bushel.

U.S. corn futures traded higher Wednesday, buoyed by the rebound in soybeans and underlying technical support. CBOT December corn edged up 2 1/4 cents, or 0.3%, to $7.25 3/4.


Write to Andrew Johnson Jr. at andrew.johnsonjr@dowjones.com
(MORE TO FOLLOW) Dow Jones Newswires
November 14, 2012 15:44 ET (20:44 GMT)
DJ US GRAIN AND SOY REVIEW: Beans Rise on Strong Demand


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