Soybeans Slide After 14% Advance as China Seen Canceling Cargoes

March 12, 2014 03:58 AM
Soybeans Slide After 14% Advance as China Seen Canceling Cargoes

Soybeans fell for a third day on speculation a rally since the beginning of February may curb demand and prompt China, the world’s biggest buyer, to cancel more purchases. Wheat rose.

China imported 4.81 million metric tons last month, up from 2.9 million tons a year earlier, customs data show. The country canceled 245,000 tons of U.S. soybeans for delivery by Aug. 31, the U.S. Department of Agriculture said March 5.

"When you have beans at $14 a bushel, it is very hard to continue to be bullish on it," Ole Houe, director of advisory services at Ikon Commodities Pty Ltd., said by phone from Sydney. "The quantity of cancellations is rising by the day and that’s got everybody running scared off beans."

Soybeans for May delivery dropped 2.8 percent to $13.7375 a bushel on the Chicago Board of Trade by 7:12 a.m., and reached $13.725, the lowest since Feb. 25. Prices surged 14 percent through March 7, when they touched $14.60, since the start of February.

As of Feb. 27, China imported 25.5 million tons of U.S. beans since Sept. 1, about 69 percent of total shipments by the country, according to USDA data. The U.S. is the world’s biggest soybean exporter after Brazil, USDA data show.

"There has been more talk of China rolling or canceling soybean contracts out of Brazil and U.S.," Paul Georgy, the president of Allendale Inc., wrote in a market comment. "Crush margins in China continue to deteriorate."

There’s speculation China buyers may have canceled about 1 million tons of Brazilian soybeans, John Kennedy, a senior market strategist at RJO Futures in Chicago, said in an online market comment today.

Corn for delivery in May slipped 0.9 percent to $4.79 a bushel after climbing 1 percent yesterday. Wheat for delivery the same month dropped 0.3 percent to $6.5675 a bushel. Milling wheat for November delivery traded on NYSE Liffe in Paris fell 0.1 percent to 200.75 euros ($278.80) a ton.



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