Soybean Prices Climb on ‘Phenomenal’ U.S. Exports to China

Dec. 15 (Bloomberg) -- Soybeans prices rose to a two-week high on increasing demand by Chinese importers and U.S. processors.

U.S. exporters sold 290,000 metric tons to China for delivery before Sept. 1, the Department of Agriculture said today. Cumulative U.S. sales to all customers from Sept. 1 to Dec. 3 are up 56 percent from a year earlier. U.S. processors used 4.36 million tons last month, up 15 percent from a year earlier, an industry group said yesterday.

“Demand is very strong, and exports to China are phenomenal,” said Dale Durchholz, the senior market analyst at AgriVisor LLC in Bloomington, Illinois. “Processors are running near 100 percent of capacity” to produce animal feed for overseas buyers, he said.

Soybean futures for March delivery rose 0.25 cent to close at $10.62 a bushel on the Chicago Board of Trade, after reaching $10.7475, the highest price since Dec. 1. The contract has gained 3.4 percent in the past three sessions.

Earlier, the price dropped as much as 0.5 percent on favorable weather forecasts for South American crops.

U.S. soybean and livestock-feed exports have surged after drought cut output this year in Brazil and Argentina, the two biggest growers and exporters of the oilseed behind the U.S.

The USDA says production in those countries slipped to 89 million metric tons this year, down 17 percent from 2008. Output in 2010 may rise 30 percent to 116 million tons, the department said last week in a report.

Feed Exports

Export sales of soybean meal, an animal feed, totaled 297,200 tons in the week ended Dec. 3, up 30 percent from the average during the previous four weeks, USDA data show. Since Oct. 1, sales surged 79 percent to 5.101 million tons from a year earlier.

“If South America produces record crops, then prices are headed lower,” Durchholz said. “But we are just entering the critical crop-development period, and any weather problems will see prices soar.”

Soybean-meal futures for January delivery rose 60 cents, or 0.2 percent, to $316.80 per 2,000 pounds. Earlier the price reached $320.90, the highest level for a most-active contract since July 2. The most-active contract has gained 5.7 percent this year.

Soybeans are the second-biggest U.S. crop, valued at $27.4 billion last year, behind corn at $47.4 billion, government figures show.