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Soybeans jump on demand outlook

10/14/2011 @ 3:18pm

U.S. soybean futures finished higher Friday on expectations for increasing demand from China, the top importer of the oilseed.

Soybeans for November delivery, the most actively traded contract, jumped 13 cents, or 1%, to $12.70 a bushel at the Chicago Board of Trade. Corn and wheat futures posted smaller gains.

Pushing prices higher were forecasts that China will ramp up its purchases as the U.S. harvest wraps up. Demand is expected to shift back to the U.S. from South America, where farmers harvested their last crop in the spring and are starting to plant their next crop.

The U.S. is becoming "really the only game in town" for foreign buyers looking for soybeans because U.S. farmers have fresh supplies to sell, said Dale Durchholz, analyst for AgriVisor, an agricultural advisory firm in Illinois. "For the next few months, beans have got to come out of the U.S.," he said.

Export sales send CME Group grains higher Friday

Higher corn export sales numbers, lower yields and a potential Dead Cat Bounce for soybeans helped buoy the CME Group grains on Friday.

Weekly export data issued Friday showed China was the top buyer of soybeans in the week ended Oct. 6, booking 83% of the 672,400 tons that were sold, according to the U.S. Department of Agriculture. Total sales were within analysts' expectations.

Still, traders are worried about the potential for strong demand to reduce supplies after the USDA unexpectedly cuts its outlook for year-end inventories this week. For the moment, traders are less concerned about corn and wheat supplies because the government increased its inventory forecasts for the grains.

"Beans probably have the least downside risk here for awhile," Durchholz said, referring to prices for the crops.

Corn for December delivery rose 1 3/4 cents, or 0.3%, to $6.40 a bushel. Soft red winter wheat for December delivery gained 4 3/4 cents, or 0.8%, to $6.22 3/4 a bushel.

Other markets

December soybean oil ended up 2.1% at 53.54 cents per pound, and December soybean meal rose 0.3% to $327.60 per short ton. November rice climbed 1.3% to $16.62 1/2 per hundredweight, and December ethanol advanced 1.7% to $2.590 per gallon. December oats slipped 0.5% to $3.40 a bushel.

At the Kansas City Board of Trade, hard red winter wheat for December delivery strengthened 0.9% to $7.07 1/2 a bushel. Hard red spring wheat for December delivery added 1% to close at $8.92 1/2 a bushel at MGEX in Minneapolis.

-By Tom Polansek, Dow Jones Newswires; 312-341-5780; tom.polansek@dowjones.com
(END) Dow Jones Newswires
October 14, 2011 15:59 ET (19:59 GMT)
DJ US GRAIN AND SOY REVIEW: Soybeans Jump On Demand Expectations->copyright

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