News
15.02.2010
Soybeans, Corn, Wheat Drop After China Seeks to Rein in Growth
Soybeans, corn and wheat fell after China ordered banks to set aside more deposits as reserves, raising concern that tighter lending in the world’s most populous country will hinder a global economic recovery.
Soybeans for March delivery fell 1 percent to $9.3325 a bushel in electronic trading on the Chicago Board of Trade at 2:14 p.m. Paris time, while corn fell 0.8 percent and wheat slumped 1.7 percent.
“China is the world’s largest buyer of soybeans, and there are concerns about interest rates and demand,” said Julien Thierry, a consultant with Paris-based Agritel. “Demand concerns are prompting a decline.”
The People’s Bank of China told banks to maintain larger reserves for the second time in a month, as policy makers aim to avert asset bubbles and curb inflation after flooding the economy with money last year to help lift economic growth.
Soybeans also declined on speculation investors and farmers in the U.S., the world’s biggest producer and exporter of the oilseed, are selling contracts to lock in prices as futures head for their first weekly gain in six.
The oilseed has climbed 2.2 percent this week. Corn for March delivery slipped to $3.72 a bushel today, on track for a 5.8 percent weekly increase.
Soybeans and corn climbed this week as a weaker dollar lifted the appeal of U.S. supplies, and as forecasts for snow and freezing weather next week in the Midwest, the country’s largest growing region, raised concern about disruptions to deliveries.
Taking Profit
“A lot of farmers will move to lock in prices,” Jonathan Barratt, managing director at Commodity Broking Services Pty. in Sydney, said by phone today. “Investors will look to take profit because the run up has been pretty good.”
Argentina’s Buenos Aires Cereals Exchange said the country will harvest 19.3 million metric tons of corn this season, up from last week’s forecast of 18.4 million tons.
Wheat for March delivery fell to $4.85 a bushel, trimming the gain for the week to 2.5 percent. Milling wheat traded on NYSE Liffe in Paris for delivery in March fell 0.2 percent to 125.75 euros ($171) a ton.
U.S. wheat prices will peak at $5 a bushel next season and slide to $4.75 by 2016, the U.S. Department of Agriculture said yesterday. Global wheat inventories will climb to 195.9 million tons this year, from 164 million tons a year earlier, the USDA said this week.
“We’ve got world stocks at levels which would not encourage planting,” Barratt said. Forecast output declines should support prices, he said.
Bloomberg
