Soybeans Rise on Speculation China Oilseed Demand to Increase

April 29 (Bloomberg) --Soybeans rose for a second day on speculation that China’s surging economy will bolster demand for supplies from the U.S., the world’s largest producer and exporter.

China bought 120,000 metric tons of the oilseed for delivery before Sept. 1, the U.S. Department of Agriculture said today. In a separate report, the USDA said the Asian nation purchased 691,000 tons for delivery in the following year. Yesterday, the department said China had made its largest corn purchase in nine years.

“Another sale of soybeans to China is supporting the rally,” said Bill Nelson, a senior economist for Doane Agricultural Services Co. in St. Louis. “The market is also getting a bullish kick from the Chinese purchase of U.S. corn” because it suggests demand is outpacing production, Nelson said.

Soybean futures for July delivery rose 2.5 cents, or 0.3 percent, to $9.96 a bushel on the Chicago Board of Trade. On April 26, the most-active contract touched $10.20, the highest price since Jan. 11.

China’s top grain administrator said last week that stockpiles of grain and cooking oil need to be increased to stabilize domestic prices. China’s economy in the first quarter expanded at the fastest pace in almost three years.

Soybeans for delivery in November, after the harvest, rose on speculation that the record pace of U.S. corn planting will result in farmers sowing more of the grain, and fewer acres with soybeans, Nelson said.

Planting Outlook

The USDA said March 30 that farmers intend to plant soybeans on a record 78.098 million acres this year, up 0.8 percent from 77.451 million last year.

“Farmers probably will plant fewer acres of soybeans” than the USDA said in March, Nelson said. “The fast pace of corn plantings in giving soybeans a boost.”

About 50 percent of the corn crop was seeded as of April 25, compared with 19 percent a week earlier and 20 percent last year, the USDA said this week. Since 2000, when more than 50 percent of the crop was planted by May 1, farmers reduced soybean sowings, Nelson said.

In 2000, 2004, 2005 and 2006, when corn plantings topped 50 percent at this stage of the season, the USDA reduced its estimate of soybean plantings on average about 900,000 acres from a March survey of farmers to its June update, Nelson said.

Soybean futures for November delivery rose 5 cents, or 0.5 percent, to $9.705, the second straight gain. The contract has risen 5.7 percent this month.

Soybeans are the second-biggest U.S. crop, behind corn, with a 2009 value of $31.8 billion, government figures show.