Soybeans Drop as U.S. Export Sales Fall, China Cancels Purchase

Soybeans fell in Chicago, heading for a second weekly drop, after export sales from the U.S. slid and China scrapped an order, signaling importers may be switching to South American supplies.

U.S. exporters sold 396,332 metric tons of soybeans from the prior and next harvests in the week to Feb. 10, a 59 percent plunge from a week earlier, the U.S. Department of Agriculture said yesterday. It also said China, the biggest buyer, canceled a 120,000-ton purchase from the U.S. That would have been for delivery in the marketing year to Aug. 31.

“Beans are starting to turn a bit negative, and two weeks of poor sales and cancellations cannot be good,” said Connor Noonan, an analyst at Castlestone Management Ltd.

May-delivery soybeans slid 22 cents, or 1.6 percent, to $13.945 a bushel at 10:27 a.m. Londontime on the Chicago Board of Trade. The oilseed is down 1.5 percent this week.

“We expect at this time of the year a seasonal decline in U.S. exports as importers switch to South American supplies,” Luke Mathews, a commodity strategist at Commonwealth Bank ofAustralia, said by phone. “The cancellation of 120,000 tons of U.S. beans by the Chinese is perhaps along those lines.”

Prices also fell as China raised banks’ reserve requirements for the second time this year to counter inflation. The country is the world’s biggest soybean importer.

The soybean crop in Brazil, the largest exporter after the U.S., may be 71 million tons, beating last year’s record 68.7 million tons, and exports may rise 13 percent to an all-time high of 33 million tons, Oil World said in a report Feb. 15. Normal or above-normal rain in the past six weeks has improved conditions, it said.

Corn for May delivery lost 6.75 cents, or 0.9 percent, to $7.1625 a bushel, paring a weekly climb. The grain reached $7.25, the highest price since July 2008.

Wheat for May delivery dropped 12.25 cents, or 1.4 percent, to $8.7125 a bushel, poised for a 3.1 percent decline this week. Milling wheat for May delivery traded on NYSE Liffe in Paris slid 0.8 percent to 259.50 euros ($351.88) a ton.

(Source: http://www.bloomberg.com/news/2011-02-18/soybean-futures-decline-as-u-s-export-sales-fall-china-cancels-purchase.html)