Soybeans Rise on Speculation China Will Increase Imports

Soybean futures rose for the first time in four sessions on speculation that China will buy more supplies from the U.S., the world’s biggest exporter.

China, the largest consumer, may import 54.5 million metric tons in the year ending July 31, up 16 percent from a year earlier, Hamburg-based Oil World said in a report today. The processing of soybeans into animal feed and cooking oil will rise 13 percent, the researcher said. Earlier, prices fell after China raised interest for the third time since mid-October.

“Raising interest rates will not slow demand for soybeans,” said Tim Hannagan, a market analyst for PFG Best Inc. in Chicago. “China may need to import more to restock depleted inventories and slow food inflation.”

Soybean futures for March delivery rose 9.75 cents, or 0.7 percent, to close at $14.3425 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price dropped to a one-week low of $14.14. On Feb. 3, the commodity touched $14.525, the highest since July 2008.

Last month, China signed 21 purchasing agreements in Chicago for U.S. supplies valued at $6.68 billion, the U.S. Soybean Export Council said. The deals, with companies including Archer Daniels Midland Co., Bunge Ltd. and Cargill Inc., were for 11.5 million tons, or 423 million bushels, the group said.

In 2009, the U.S. soybean  crop was valued at $31.8 billion, second only to corn at $48.6 billion, government figures show.

(Source: http://www.bloomberg.com/news/2011-02-08/soybeans-rise-on-speculation-china-will-increase-imports.html)