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Chinese shopping spree sends soybeans soaring

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The biggest Chinese shopping spree in more than a year, combined with a batch of robust corporate results, sent US soybean prices soaring 7%.

Official figures showing China had bought 1.92m tones of US soybeans sent Chicago's August soybean contract up 70.5 cents to $11.28 a bushel, with the contract hitting 11.34 ¼ a bushel at one stage

"Prices exploded from the opening, sharply higher across the floor with beans, especially old crop, leading the way," Vic Lespinasse, GrainAnalyst.com's Chicago market watcher, said.

'Endless demand'

The order was the biggest in since last summer, US Department of Agriculture data showed.

"Chinese bean demand seems to have no end, old crop or new," Mr Lespinasse said.

Indeed, investors rushed into new crop contracts too, with November beans closing 54.5 cents higher at $9.70 ½ a bushel.

The US export news followed rumours, as reported by Agrimoney.com on Wednesday, that Chinese crushers, disappointed at the high prices in Beijing's state grain auctions, were nosing around for US beans instead.

With the USDA already forecasting that American stocks are on course to hit their lowest since 1977, the market has been particularly sensitive to talk of increased buying by China, which has chosen to focus domestic farm production other crops.

External markets helped too, with forecast-beating results from the likes of AstraZeneca, Dow Chemical and Honda Motor helping shares higher, and oil to 6% gains.

Corn leaps

Soybeans' performance gave a leg up to corn, in addition to the grain's own robust data.

Weekly export sales statistics put corn shipments at 1.26m tonnes, higher than traders had expected.

Some talk of the end of the benign weather spell for parts of the US corn belt helped too with a dry spell beginning to raise eyebrows, despite continuing cool temperatures, which have cut concerns of heat stress.

And corn's status as a major ethanol feedstock also helped when New York crude was 5.9% higher at $67.07 as barrel at 19:00 GMT.

September corn closed up 11.5 cents at $3.32 ¼ a bushel, with some forward contracts doing even better. March 2010, for instance, soared 14 cents to $3.54 ½ a bushel.

Bumper yields

Wheat, however, missed out on much of the party, depressed by talk of the Wheat Quality Council's tour of spring crop areas in North Dakota finding huge yields.

Meanwhile, the latest International Grains Council data pointed to a loosening market, with the group raising its 2009-10 production forecast by 2m tonnes, and cutting its consumption outlook by a similar amount.

September wheat ended 5.25 cents higher at $5.16 ¾ a bushel, in line with forward lots.

In Europe, London wheat for November bounced off £1.50 off its contract low to end at £102.75 a tonne, with Paris August wheat unchanged at E127.00 a tonne.

August rapeseed put in a better showing for Paris, jumping E6.75 a tonne from its contract low to end at E252.50 a tonne.

By Agrimoney.com

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