Thursday, July 9, 2009

Soybean Cash Premium Narrows on Speculation Demand Will Decline

July 8 (Bloomberg) -- Cash bids for soybeans at export terminals near New Orleans narrowed their premium relative to Chicago futures on speculation that offshore demand for U.S. supplies is declining.

The so-called spot-basis bid, or premium, offered for soybeans shipped to the New Orleans area fell to 95 cents to $1 a bushel above July futures on the Chicago Board of Trade, from $1.10 to $1.38 yesterday, the U.S. Department of Agriculture said today in a report. The premium over August futures narrowed to 65 cents from 65 cents to 95 cents yesterday.

“That really tells you that the guy who needs to be covered next month is not there today, he’s going to wait to buy,” said Jeff Hainline, president of Advance Trading Inc. in Bloomington, Illinois.

Soybean futures for November delivery fell 3 cents, or 0.3 percent, to $8.92 a bushel on the CBOT. The price earlier touched $8.8125, the lowest since March 16. The July contract dropped 4.4 percent to $10.84 a bushel.

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