Soybeans Rise as South America Crops Shrink, U.S. Exports Gain

May 21 (Bloomberg) -- Soybean prices rose for the fourth straight day after a government report showed lower oilseed production in South America, improving demand prospects for supplies from the U.S., the world’s biggest grower and exporter.

U.S. exporters reported sales of 700,634 metric tons in the week ended May 14, up 74 percent from the previous week, the Department of Agriculture said today in a report. In the four weeks ended on that date, sales of animal feed made from soybeans doubled from a year earlier. Yesterday, soybean futures climbed to the highest in seven months.

“Export sales continue to be very strong,” said Mike Zuzolo, the president of Risk Management Commodities Inc. in Lafayette, Indiana. “Demand is not slowing.”

Soybean futures for July delivery rose 6 cents, 0.5 percent, to $11.75 a bushel on the Chicago Board of Trade. Yesterday, the price reached $11.895, the highest since Sept. 26. The commodity has jumped 35 percent since the end of February, including 3.9 percent this week.

Shrinking crops in Brazil and Argentina, the two biggest exporters after the U.S., are boosting demand for U.S. soybeans and animal feed made from the oilseed, Zuzolo said. Argentina is the biggest exporter of animal feed and vegetable oil produced from the oilseed.

Estimated global production this year will fall to 212.8 million tons because of smaller crops in South America, the USDA said May 12. The agency forecast 218.8 million a month ago. Last year, output was a record 221.1 million.

The Buenos Aires Cereals Exchange yesterday cut its estimate for this year’s Argentina soybean harvest by 1.8 percent to 32.2 million tons after yields in parts of the Pampas were lower than expected. The USDA forecast a crop of 34 million on May 12. Last year, the harvest was 46.2 million.

Soybeans are the second-biggest U.S. crop, valued in 2008 at a record $27.4 billion, government figures show. Corn is the biggest at $47.4 billion.