China makes big U.S. soybean buy
China's demand for U.S. soybeans doesn't appear to be slowing, with officials announcing $1.8 billion in purchases of the oilseed Thursday, keeping pressure on farmers to plant a big crop this spring.
A Chinese trade delegation, including representatives from China's largest soybean processors, announced the sales agreements in a ceremony coinciding with Chinese President Hu Jintao's visit to Chicago. The size and timing of the export agreements weren't immediately available.
A large sale of soybeans was expected this week as Chinese officials visited. For the current crop year, Chinese buyers have made record purchases totaling 22.84 million metric tons, 13% more than a year ago and more than double sales in 2007 and 2008.
- Talk: China 'will continue to buy soybeans at a steady rate'
- Also: Grains rally partly on 'China-buying talk'
Soybean futures prices are trading at more than two-year highs as strong global demand fuels concerns farmers won't be able to replenish depleted inventories. Farmers are weighing whether to sow more soybean this spring, or grow more corn, which is also trading above two-year highs.
"Demand is growing faster than supply can grow, and we've got an acreage battle on many fronts," said Jim Gerlach, president of A/C Trading, an Indiana-based brokerage firm.
Chinese demand has been sparked by a growing appetite among the nation's middle class for pork and chicken, animals that are fattened with feed made from soybeans.
Soybeans for March delivery, the most active futures contract, settled 2 3/4 cents, or 0.2%, higher at $14.14 1/4 a bushel Thursday at the Chicago Board of Trade.
-By Tom Polansek, Dow Jones Newswires; 312-341-5780; firstname.lastname@example.org
--Andrew Johnson Jr. contributed to this article.
(END) Dow Jones Newswires
January 20, 2011 16:33 ET (21:33 GMT)
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