Thursday, April 8, 2010

Soybeans Rise as China May Allow Yuan Gain, Boosting Imports

April 7 (Bloomberg) -- Soybeans rose to a one-week high on speculation that China, the world’s biggest importer, will allow its currency to climb against the dollar, enhancing the allure of imports from the U.S.

The Chinese yuan is trading close to the highest level in 11 weeks. The government may allow the currency to appreciate to limit the rate of inflation, which reached a 16-month high in February. U.S. Treasury Secretary Timothy F. Geithner will meet Chinese Vice Premier Wang Qishan tomorrow in Beijing.

“There’s some buying tied to speculation that China will allow its currency to rise against the dollar and boost U.S. exports,” said Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis.

Soybean futures for May delivery rose 8 cents, or 0.8 percent, to $9.525 a bushel on the Chicago Board of Trade. Earlier, the price reached $9.57, the highest level for a most- active contract since March 31. The commodity has dropped 9.2 percent this year as rain improved prospects for record crops in Brazil and Argentina.

Processors in China bought about 15 cargoes of soybeans last week as profit margins increased, three industry executives said. Orders averaged three to five cargoes a week in March, one executive said.

Latin American will supply about half of last week’s purchases for shipment from May 1 to Sept. 30 with the rest from the U.S., the executives said.

Imports Climb

China may increase imports 3.4 percent to 42.5 million metric tons in the 12 months ending Sept. 30, the U.S. Department of Agriculture said last month. Imports have more than doubled in the past six years to meet domestic demand for animal feed and vegetable oil, USDA data show.

Profit from processing imports has risen to more than 200 yuan ($29) a ton after domestic soybean-oil prices gained and the cost of beans from overseas fell, the China National Grain and Oils Information Center said today.

The soybean crop in the U.S. was valued at $31.8 billion last year, second only to corn, government figures show.