Soybeans climbed, adding to a fifth weekly gain as Chinese demand is set to drain U.S. stocks to the lowest in nine years. Wheat fell a second day on concern a finding of rogue gene-altered wheat will hurt U.S. exports.
The U.S. sold 120,000 metric tons of soybeans to China for delivery in the year starting Sept. 1, the USDA said yesterday. China’s imports of the oilseed may jump 19% in May and June from a year earlier, after falling in the first four months, Oil World said May 28.
Soybeans for July delivery rose 0.8% to $15.075 a bushel on the Chicago Board of Trade by 7:57 a.m. Prices are up 7.8% in May, the biggest monthly gain since July, when the worst U.S. drought since the 1930s eroded production and sent soybeans to a record in September.
“It already will be very tight running through to the new crop, but if export sales were to continue at the recent pace, then it will get incredibly tight,” said Paul Deane, an agricultural economist at Australia & New Zealand Banking Group Ltd. in Melbourne.
U.S. export sales of soybeans for the 2013-14 crop year were 756,594 tons in the week ended May 23, the USDA reported. Total outstanding sales increased to 12.3 million tons from 11.7 million tons a week earlier.
Limited U.S. supplies as well as export sales and planting delays have propped up prices, according to Oil World. U.S. reserves on Aug. 31 will contract to 125 million bushels, the lowest since 2004, the government said.
Citigroup Inc. this week raised its price forecast for old-crop soybeans to $14.35 in the second quarter, citing short-term tightness and supply constraints.
Wheat for July delivery fell 0.6% to $6.9425 a bushel for a 5% slide in May. Japan suspended imports of some U.S. varieties yesterday after the discovery of an unapproved, genetically modified strain growing in an Oregon field.
South Korean flour millers will suspend purchases of U.S. wheat until the country’s food safety ministry completes its examination, the Korea Flour Mills Industrial Association said in an e-mailed statement.
“Operators fear that the discovery of traces of GMOs in wheat will harm the export reputation of the U.S.,” French farm adviser Agritel wrote in a market comment today, referring to genetically modified crops.
Milling wheat for November delivery traded on NYSE Liffe in Paris was unchanged at 204.50 euros ($265.71) a ton. The spread over Chicago-traded wheat for December delivery increased to $1.93 a ton from $1.06 a ton yesterday.
Corn for December delivery was little changed at $5.62 a bushel. Prices have declined 13% this month.