Soybean Futures Set for a Seventh Weekly Gain on Rising Demand

June 12 (Bloomberg) -- Soybean futures are set for a seventh weekly gain in Chicago after reaching a nine-month high yesterday as the weaker dollar made U.S. supplies more attractive to overseas buyers.

The Dollar Index, which tracks the greenback against six major currencies, has fallen 6.7 percent this quarter. U.S. inventories of the oilseed may drop to a 32-year low of 110 million bushels by Aug. 31, the nation’s agriculture department said June 10.

“People are generally concerned about the supply issue, as well as demand,” Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney, said by phone today. “We’ve seen the dollar weak as well. It’s a combination of everything.”

Soybeans for July delivery gained as much as 1.2 percent to $12.8175 a bushel in after-hours trading on the Chicago Board of Trade, after reaching $12.9125 a bushel yesterday, the highest since Sept. 3. The most-active contract was at $12.7225 at 2:21 p.m. in Singapore and is set for a 3.8 percent gain this week.

Soybean meal, an ingredient in feeds for livestock, rose as much as 1 percent to $432.30 per 2,000 pounds, and was last at $428.20. The July-delivery contract is headed for an 8.1 percent gain this week, after trading at an 11-month high of $433.40 yesterday.

The futures have gained 66 percent in the past six months, outpacing the 49 percent rise in soybean prices, after the market underestimated demand, Commodity Broking’s Barratt said.

“We obviously have some very large demand out of China,” he said.

U.S. Exports

Shipments of soybean meal from the U.S., the world’s third- biggest supplier, rose 34 percent to 189,821 metric tons in the week ended June 4 from a week earlier, the U.S. Department of Agriculture said in a report yesterday.

Crushing soybeans has become unprofitable in China after costs of the bean imports surged, state-owned China National Grain and Oils Information Center said June 4.

“There just seems to be more demand for the meal, rather than the actual bean itself,” Barratt said. “You might have a stockpile in beans which can be drawn into or drawn down, but if you’re not refining into the meal, then you’ve got an issue.”

Soybean oil exports rose 54 percent to 6,577 tons, from 4,278 tons a week earlier, the USDA said.

Corn for July delivery fell 0.5 percent to $4.39 a bushel, taking its loss for the week to 1.1 percent.

Korean Tender

Nonghyup Feed Inc., South Korea’s biggest single buyer of feed grains, purchased as much as 275,000 tons of corn, said two industry executives who participated in yesterday’s tender.

Wheat for July delivery fell 0.8 percent to $5.90 a bushel, taking the weekly loss to 5.3 percent.

Morocco will reap 4.5 million tons of soft wheat in the 2009-10 marketing year, 77 percent more than a year earlier, the USDA Foreign Agricultural Service reported. Durum wheat production will increase 61 percent to 2 million tons, the FAS said in a report dated June 8.

The country will import 1.5 million tons of common wheat and 600,000 tons of durum wheat, the FAS said.

Canada’s wheat production may fall 18 percent this year as dry, cool conditions in the western Prairies slow crop development and wet weather in Manitoba delays seeding, the Canadian Wheat Board said in a report.

Canada’s harvest may include 16.4 million tons of non-durum wheat, down from 20 million tons a year earlier, and 4.4 million tons of durum varieties, down from 5.5 million tons, the CWB said in a preliminary forecast.